exv10w51






Exhibit 10.51




      



CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
IS OMITTED AND NOTED WITH “[REDACTED].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.




EXECUTION COPY




      




SECOND AMENDED AND RESTATED CREDIT, SECURITY, GUARANTY

AND PLEDGE AGREEMENT




Dated
as of July 25, 2008

among




LIONS GATE ENTERTAINMENT INC.




and




LIONS GATE UK LIMITED




and




LIONS GATE AUSTRALIA PTY LIMITED




as Borrowers




and




THE GUARANTORS REFERRED TO HEREIN




and




THE LENDERS REFERRED TO HEREIN




and




JPMORGAN CHASE BANK, N.A.

as Administrative Agent




and

as Issuing Bank




and




WACHOVIA BANK, N.A.

as Syndication Agent




 





J.P. MORGAN SECURITIES INC.

as Sole Bookrunner and Sole Lead Arranger




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	1.

	 	DEFINITIONS
	 	 	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	2.

	 	THE LOANS
	 	 	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 2.1
	 	Loans to LGEI
	 	 	40	 
	 

	 	SECTION 2.2
	 	Intentionally Omitted
	 	 	43	 
	 

	 	SECTION 2.3
	 	Intentionally Omitted
	 	 	43	 
	 

	 	SECTION 2.4
	 	Intentionally Omitted
	 	 	43	 
	 

	 	SECTION 2.5
	 	Notes; Repayment
	 	 	43	 
	 

	 	SECTION 2.6
	 	Letters of Credit
	 	 	43	 
	 

	 	SECTION 2.7
	 	Interest
	 	 	48	 
	 

	 	SECTION 2.8
	 	Commitment Fee and Other Fees
	 	 	49	 
	 

	 	SECTION 2.9
	 	Termination and/or Reduction of the Commitments
	 	 	50	 
	 

	 	SECTION 2.10
	 	Default Interest; Alternate Rate of Interest
	 	 	50	 
	 

	 	SECTION 2.11
	 	Continuation and Conversion of Loans
	 	 	51	 
	 

	 	SECTION 2.12
	 	Prepayment of Loans; Reimbursement of Group Lenders
	 	 	53	 
	 

	 	SECTION 2.13
	 	Change in Circumstances
	 	 	55	 
	 

	 	SECTION 2.14
	 	Change in Legality
	 	 	58	 
	 

	 	SECTION 2.15
	 	United States Withholding
	 	 	59	 
	 

	 	SECTION 2.16
	 	Foreign Currency Conversion; Withholding
	 	 	61	 
	 

	 	SECTION 2.17
	 	Intentionally Omitted
	 	 	64	 
	 

	 	SECTION 2.18
	 	Interest Adjustments
	 	 	64	 
	 

	 	SECTION 2.19
	 	Manner of Payments
	 	 	64	 
	 

	 	SECTION 2.20
	 	Provisions Relating to the Borrowing Base
	 	 	65	 
	 

	 	SECTION 2.21
	 	Loans to UK Borrower
	 	 	66	 
	 

	 	SECTION 2.22
	 	Loans to Australia Borrower
	 	 	68	 
	 

	 	SECTION 2.23
	 	Increase in Total Commitment
	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	3.	 	REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES	 	 	72	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 3.1
	 	Existence and Power
	 	 	72	 
	 

	 	SECTION 3.2
	 	Authority and No Violation
	 	 	72	 
	 

	 	SECTION 3.3
	 	Governmental Approval
	 	 	73	 






i









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 3.4
	 	Binding Agreements
	 	 	73	 
	 

	 	SECTION 3.5
	 	Financial Statements
	 	 	73	 
	 

	 	SECTION 3.6
	 	No Material Adverse Change
	 	 	73	 
	 

	 	SECTION 3.7
	 	Ownership of Pledged Securities, Subsidiaries, etc
	 	 	74	 
	 

	 	SECTION 3.8
	 	Copyrights, Trademarks and Other Rights
	 	 	75	 
	 

	 	SECTION 3.9
	 	Fictitious Names
	 	 	75	 
	 

	 	SECTION 3.10
	 	Title to Properties
	 	 	76	 
	 

	 	SECTION 3.11
	 	Places of Business
	 	 	76	 
	 

	 	SECTION 3.12
	 	Litigation
	 	 	76	 
	 

	 	SECTION 3.13
	 	Federal Reserve Regulations
	 	 	76	 
	 

	 	SECTION 3.14
	 	Investment Company Act
	 	 	76	 
	 

	 	SECTION 3.15
	 	Taxes
	 	 	76	 
	 

	 	SECTION 3.16
	 	Compliance with ERISA
	 	 	77	 
	 

	 	SECTION 3.17
	 	Agreements
	 	 	77	 
	 

	 	SECTION 3.18
	 	Security Interest
	 	 	78	 
	 

	 	SECTION 3.19
	 	Disclosure
	 	 	78	 
	 

	 	SECTION 3.20
	 	Distribution Rights
	 	 	78	 
	 

	 	SECTION 3.21
	 	Environmental Liabilities
	 	 	78	 
	 

	 	SECTION 3.22
	 	Pledged Securities
	 	 	79	 
	 

	 	SECTION 3.23
	 	Compliance with Laws
	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	4.	 	CONDITIONS PRECEDENT	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 4.1
	 	Conditions Precedent to Effectiveness of this Amendment and Restatement
	 	 	80	 
	 

	 	SECTION 4.2
	 	Conditions Precedent to Each Loan and Letter of Credit
	 	 	84	 
	 

	 	SECTION 4.3
	 	Conditions Precedent to Loans and/or Letters of Credit under the Special Production Tranche
	 	 	84	 
	 
	 	 	 	 	 	 	 	 
	5.	 	AFFIRMATIVE COVENANTS	 	 	86	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 5.1
	 	Financial Statements and Reports
	 	 	86	 
	 

	 	SECTION 5.2
	 	Corporate Existence; Compliance with Laws
	 	 	87	 
	 

	 	SECTION 5.3
	 	Maintenance of Properties
	 	 	88	 
	 

	 	SECTION 5.4
	 	Notice of Material Events
	 	 	88	 






ii









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 5.5
	 	Insurance
	 	 	89	 
	 

	 	SECTION 5.6
	 	Production and Distribution
	 	 	90	 
	 

	 	SECTION 5.7
	 	Music
	 	 	90	 
	 

	 	SECTION 5.8
	 	Copyrights and Trademarks
	 	 	90	 
	 

	 	SECTION 5.9
	 	Books and Records
	 	 	91	 
	 

	 	SECTION 5.10
	 	Third Party Audit Rights
	 	 	91	 
	 

	 	SECTION 5.11
	 	Observance of Agreements
	 	 	92	 
	 

	 	SECTION 5.12
	 	Laboratories; No Removal
	 	 	92	 
	 

	 	SECTION 5.13
	 	Taxes and Charges; Indebtedness in Ordinary Course of Business	 	 	92	 
	 

	 	SECTION 5.14
	 	Liens
	 	 	93	 
	 

	 	SECTION 5.15
	 	Further Assurances; Security Interests
	 	 	93	 
	 

	 	SECTION 5.16
	 	ERISA Compliance and Reports
	 	 	93	 
	 

	 	SECTION 5.17
	 	Subsidiaries
	 	 	94	 
	 

	 	SECTION 5.18
	 	Environmental Laws
	 	 	94	 
	 

	 	SECTION 5.19
	 	Use of Proceeds
	 	 	95	 
	 

	 	SECTION 5.20
	 	Uncompleted Items of Product
	 	 	95	 
	 

	 	SECTION 5.21
	 	Negative Cost Statements
	 	 	96	 
	 

	 	SECTION 5.22
	 	Distribution Agreements, Acceptable L/C’s, Etc.
	 	 	97	 
	 

	 	SECTION 5.23
	 	Completion Guaranty
	 	 	97	 
	 

	 	SECTION 5.24
	 	Security Agreements with the Guilds
	 	 	97	 
	 

	 	SECTION 5.25
	 	Excluded Beneficial Interests
	 	 	97	 
	 

	 	SECTION 5.26
	 	Post Closing Matters
	 	 	97	 
	 
	 	 	 	 	 	 	 	 
	6.	 	NEGATIVE COVENANTS	 	 	98	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 6.1
	 	Limitations on Indebtedness and Preferred Equity Interests
	 	 	98	 
	 

	 	SECTION 6.2
	 	Limitations on Liens
	 	 	100	 
	 

	 	SECTION 6.3
	 	Limitation on Guarantees
	 	 	102	 
	 

	 	SECTION 6.4
	 	Limitations on Investments
	 	 	103	 
	 

	 	SECTION 6.5
	 	Restricted Payments
	 	 	104	 
	 

	 	SECTION 6.6
	 	Intentionally Omitted
	 	 	104	 






iii









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 6.7
	 	Consolidation, Merger, Sale or Purchase of Assets, etc.
	 	 	105	 
	 

	 	SECTION 6.8
	 	Receivables
	 	 	105	 
	 

	 	SECTION 6.9
	 	Sale and Leaseback
	 	 	105	 
	 

	 	SECTION 6.10
	 	Places of Business; Change of Name
	 	 	105	 
	 

	 	SECTION 6.11
	 	Limitations on Capital Expenditures
	 	 	106	 
	 

	 	SECTION 6.12
	 	Transactions with Affiliates
	 	 	106	 
	 

	 	SECTION 6.13
	 	Business Activities
	 	 	106	 
	 

	 	SECTION 6.14
	 	Fiscal Year End
	 	 	106	 
	 

	 	SECTION 6.15
	 	Intentionally Omitted
	 	 	106	 
	 

	 	SECTION 6.16
	 	Intentionally Omitted
	 	 	106	 
	 

	 	SECTION 6.17
	 	Intentionally Omitted
	 	 	106	 
	 

	 	SECTION 6.18
	 	Intentionally Omitted
	 	 	106	 
	 

	 	SECTION 6.19
	 	Liquidity Ratio
	 	 	107	 
	 

	 	SECTION 6.20
	 	Fixed Charges Coverage Ratio
	 	 	107	 
	 

	 	SECTION 6.21
	 	Film Spending Ratio
	 	 	107	 
	 

	 	SECTION 6.22
	 	Prohibitions of Amendments and Waivers
	 	 	107	 
	 

	 	SECTION 6.23
	 	Amortization Method
	 	 	107	 
	 

	 	SECTION 6.24
	 	No Further Negative Pledge
	 	 	107	 
	 

	 	SECTION 6.25
	 	Intentionally Omitted
	 	 	108	 
	 

	 	SECTION 6.26
	 	Intentionally Omitted
	 	 	108	 
	 

	 	SECTION 6.27
	 	Bank Accounts
	 	 	108	 
	 

	 	SECTION 6.28
	 	ERISA Compliance
	 	 	108	 
	 

	 	SECTION 6.29
	 	Hazardous Materials
	 	 	108	 
	 

	 	SECTION 6.30
	 	Use of Proceeds of Loans and Requests for Letters of Credit
	 	 	108	 
	 

	 	SECTION 6.31
	 	Interest Rate Protection Agreements, etc.
	 	 	108	 
	 
	 	 	 	 	 	 	 	 
	7.	 	EVENTS OF DEFAULT	 	 	109	 
	 
	 	 	 	 	 	 	 	 
	8.	 	GRANT OF SECURITY INTEREST; REMEDIES	 	 	112	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 8.1
	 	Security Interests
	 	 	112	 
	 

	 	SECTION 8.2
	 	Use of Collateral
	 	 	112	 
	 

	 	SECTION 8.3
	 	Collection Accounts
	 	 	112	 






iv









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 8.4
	 	Credit Parties to Hold in Trust
	 	 	112	 
	 

	 	SECTION 8.5
	 	Collections, etc.
	 	 	113	 
	 

	 	SECTION 8.6
	 	Possession, Sale of Collateral, etc.
	 	 	113	 
	 

	 	SECTION 8.7
	 	Application of Proceeds on Default
	 	 	114	 
	 

	 	SECTION 8.8
	 	Power of Attorney
	 	 	115	 
	 

	 	SECTION 8.9
	 	Financing Statements, Direct Payments
	 	 	115	 
	 

	 	SECTION 8.10
	 	Further Assurances
	 	 	116	 
	 

	 	SECTION 8.11
	 	Termination and Release
	 	 	116	 
	 

	 	SECTION 8.12
	 	Remedies Not Exclusive
	 	 	116	 
	 

	 	SECTION 8.13
	 	Quiet Enjoyment
	 	 	116	 
	 

	 	SECTION 8.14
	 	Continuation and Reinstatement
	 	 	117	 
	 
	 	 	 	 	 	 	 	 
	9.

	 	GUARANTY
	 	 	 	 	117	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 9.1
	 	Guaranty
	 	 	117	 
	 

	 	SECTION 9.2
	 	No Impairment of Guaranty, etc.
	 	 	118	 
	 

	 	SECTION 9.3
	 	Continuation and Reinstatement, etc.
	 	 	118	 
	 

	 	SECTION 9.4
	 	Limitation on Guaranteed Amount etc.
	 	 	119	 
	 

	 	SECTION 9.5
	 	Voluntary Arrangements
	 	 	119	 
	 
	 	 	 	 	 	 	 	 
	10.

	 	PLEDGE
	 	 	 	 	120	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 10.1
	 	Pledge
	 	 	120	 
	 

	 	SECTION 10.2
	 	Covenant
	 	 	121	 
	 

	 	SECTION 10.3
	 	Registration in Nominee Name; Denominations
	 	 	121	 
	 

	 	SECTION 10.4
	 	Voting Rights; Dividends; etc.
	 	 	121	 
	 

	 	SECTION 10.5
	 	Remedies Upon Default
	 	 	121	 
	 

	 	SECTION 10.6
	 	Application of Proceeds of Sale and Cash
	 	 	123	 
	 

	 	SECTION 10.7
	 	Securities Act, etc.
	 	 	123	 
	 

	 	SECTION 10.8
	 	Continuation and Reinstatement
	 	 	124	 
	 

	 	SECTION 10.9
	 	Termination
	 	 	124	 
	 
	 	 	 	 	 	 	 	 
	11.	 	CASH COLLATERAL	 	 	124	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 11.1
	 	Cash Collateral Accounts
	 	 	124	 
	 

	 	SECTION 11.2
	 	Investment of Funds
	 	 	124	 






v









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 11.3
	 	Grant of Security Interest
	 	 	125	 
	 

	 	SECTION 11.4
	 	Remedies
	 	 	125	 
	 

	 	SECTION 11.5
	 	LGPA Financing
	 	 	125	 
	 
	 	 	 	 	 	 	 	 
	12.	 	THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE ISSUING BANK	 	 	126	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 12.1
	 	Administration by the Administrative Agent
	 	 	126	 
	 

	 	SECTION 12.2
	 	Advances and Payments
	 	 	127	 
	 

	 	SECTION 12.3
	 	Sharing of Setoffs, Cash Collateral and Sharing Events
	 	 	128	 
	 

	 	SECTION 12.4
	 	Notice to the Lenders
	 	 	129	 
	 

	 	SECTION 12.5
	 	Liability of the Administrative Agent, Issuing Bank and Syndication Agent
	 	 	129	 
	 

	 	SECTION 12.6
	 	Reimbursement and Indemnification
	 	 	130	 
	 

	 	SECTION 12.7
	 	Rights of Administrative Agent
	 	 	131	 
	 

	 	SECTION 12.8
	 	Independent Investigation by Lenders
	 	 	131	 
	 

	 	SECTION 12.9
	 	Agreement of Required Lenders
	 	 	131	 
	 

	 	SECTION 12.10
	 	Notice of Transfer
	 	 	131	 
	 

	 	SECTION 12.11
	 	Successor Administrative Agent
	 	 	131	 
	 

	 	SECTION 12.12
	 	Successor Issuing Bank
	 	 	132	 
	 

	 	SECTION 12.13
	 	Intentionally Omitted
	 	 	132	 
	 

	 	SECTION 12.14
	 	Quebec Power of Attorney
	 	 	132	 
	 

	 	SECTION 12.15
	 	Annex I
	 	 	133	 
	 
	 	 	 	 	 	 	 	 
	13.

	 	MISCELLANEOUS
	 	 	 	 	133	 
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 13.1
	 	Notices
	 	 	133	 
	 

	 	SECTION 13.2
	 	Survival of Agreement, Representations and Warranties, etc.
	 	 	133	 
	 

	 	SECTION 13.3
	 	Successors and Assigns; Syndications; Loan Sales; Participations
	 	 	134	 
	 

	 	SECTION 13.4
	 	Expenses; Documentary Taxes
	 	 	137	 
	 

	 	SECTION 13.5
	 	Indemnification of the Administrative Agent, the Syndication Agent, the Issuing Bank and the Lenders
	 	 	138	 
	 

	 	SECTION 13.6
	 	CHOICE OF LAW
	 	 	139	 
	 

	 	SECTION 13.7
	 	WAIVER OF JURY TRIAL
	 	 	139	 






vi









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 
	 	 	 	 	 	 	 	 
	 

	 	SECTION 13.8
	 	WAIVER WITH RESPECT TO DAMAGES
	 	 	139	 
	 

	 	SECTION 13.9
	 	No Waiver
	 	 	140	 
	 

	 	SECTION 13.10
	 	Extension of Payment Date
	 	 	140	 
	 

	 	SECTION 13.11
	 	Amendments, etc
	 	 	140	 
	 

	 	SECTION 13.11
	 	A Certain Matters Regarding PA Lender and Amendments
	 	 	141	 
	 

	 	SECTION 13.12
	 	Severability
	 	 	141	 
	 

	 	SECTION 13.13
	 	SERVICE OF PROCESS
	 	 	141	 
	 

	 	SECTION 13.14
	 	Headings
	 	 	142	 
	 

	 	SECTION 13.15
	 	Execution in Counterparts
	 	 	142	 
	 

	 	SECTION 13.16
	 	Subordination of Intercompany Indebtedness, Receivables and Advances
	 	 	142	 
	 

	 	SECTION 13.17
	 	Entire Agreement
	 	 	143	 
	 

	 	SECTION 13.18
	 	Transition
	 	 	143	 






vii









 






Schedules




	 	 	 
	1.1

	 	Schedule of Commitments
	1.2

	 	Acceptable Obligors/Allowable Amounts
	1.3

	 	Guarantors
	1.4

	 	Mandatory Cost Calculation
	3.1(a)

	 	List of jurisdictions where the Credit Parties are qualified
	3.7(a)

	 	Credit Parties/Pledged Securities
	3.7(b)(i)

	 	Beneficial Interests
	3.7(b)(ii)

	 	Excluded Beneficial Interests
	3.7(c)

	 	Inactive Subsidiaries
	3.7(d)

	 	Unrestricted Subsidiaries
	3.8(a)(i)

	 	All Items of Product
	3.8(a)(ii)

	 	Items of Product: Copyrights
	3.8(b)

	 	Trademarks
	3.9

	 	Fictitious Names
	3.11

	 	Chief Executive Office, Location of Collateral and Records
	3.12

	 	Litigation
	3.17

	 	Material Agreements
	3.18

	 	Filing Offices for UCC-1, PPSA and CCQ Financing Statements
	3.22

	 	Pledged Securities
	3.24

	 	Real Properties
	6.1

	 	Existing Indebtedness
	6.2

	 	Existing Liens
	6.3

	 	Existing Guarantees
	6.4

	 	Existing Investments
	6.27

	 	Existing Bank Accounts






Exhibits




	 	 	 
	A

	 	Form of U.S. Dollar Credit Note
	B-1

	 	Form of Opinion of Heenan Blaikie LLP, Canadian counsel to the Borrowers
	B-2

	 	Form of Opinion of O’Melveny & Myers LLP, U.S. counsel to the Borrowers
	B-3

	 	Form of Opinion of Greenberg Traurig, LLP, U.S. counsel to the Borrowers
	B-4

	 	Form of Opinion of Drinker Biddle & Reath LLP, U.S. counsel to the Borrowers
	B-5

	 	Form of Opinion of Olswang, UK counsel to the Borrowers
	C-1

	 	Form of Copyright Security Agreement
	C-2

	 	Form of Copyright Security Agreement Supplement
	D

	 	Form of Laboratory Access Letter
	E-1

	 	Form of Pledgeholder Agreement (Uncompleted Product)
	E-2

	 	Form of Pledgeholder Agreement (Completed Product)
	F-1

	 	Form of Trademark Security Agreement
	F-2

	 	Form of Trademark Security Agreement Supplement
	G

	 	Form of Contribution Agreement
	H

	 	Form of Borrowing Certificate
	I

	 	Form of Borrowing Base Certificate
	J

	 	Form of Assignment and Acceptance






 









 






	 	 	 
	K

	 	Form of Notice of Assignment and Irrevocable Instructions
	L

	 	Form of Instrument of Assumption and Joinder
	M-1

	 	Form of Hypothec
	M-2

	 	Form of Pledge of Debenture
	N

	 	Form of Special Purpose Producer Credit Agreement
	O

	 	Form of Deed of Debenture





Annex I Intercreditor Provisions Relating to Loans by Pennsylvania Regional Center, LP I to Lions
Gate Pennsylvania, Inc.




- 2 -









 






SECOND AMENDED AND RESTATED CREDIT, SECURITY, GUARANTY AND PLEDGE AGREEMENT,
dated as of September 25, 2000, as amended and restated as of December 15,
2003 and as further amended and restated as of July 25, 2008 (as may be
further amended, supplemented or otherwise modified, renewed or replaced
from time to time, the “Credit Agreement”), among (i) LIONS GATE
ENTERTAINMENT INC., a Delaware corporation (“LGEI”), LIONS GATE UK
LIMITED, a private company limited by shares incorporated in England and
Wales (the “UK Borrower”) and LIONS GATE AUSTRALIA PTY LIMITED, an
Australian company (ACN 122 557 260) (the “Australia Borrower”);
(ii) the Guarantors referred to herein; (iii) the Lenders referred to
herein; (iv) JPMORGAN CHASE BANK, N.A., a national banking association, as
agent for the Lenders (in such capacity, the “Administrative Agent”)
and as the issuer of letters of credit (in such capacity, the “Issuing
Bank”); (v) WACHOVIA BANK, N.A., a national banking association, as
syndication agent (in such capacity, the “Syndication Agent”).



INTRODUCTORY STATEMENT




          All terms not otherwise defined above or in this Introductory Statement are as defined in
Article 1 hereof or as defined elsewhere herein.




          On September 25, 2000 the Borrowers, certain of the Guarantors, the Administrative Agent and
certain lenders entered into a Credit, Security, Guaranty and Pledge Agreement, as amended and
restated as of December 15, 2003 (as amended through Amendment No. 11), providing for a secured
credit facility (the “Existing Credit Agreement”).




          LGEI has requested that the Lenders amend and restate the Existing Credit Agreement, in order,
among other things, for the Group Lenders to make available a U.S.$340,000,000 five-year senior
secured revolving credit facility (the “Facility”).




          A portion of the Loans under the Facility (i) up to a maximum amount in U.S. Dollars and
Sterling, the U.S. Dollar Equivalent of which is equal to U.S.$20,000,000, may be made in U.S.
Dollars Loans and/or Sterling Loans to the UK Borrower by the UK Lender and (ii) up to a maximum
amount in U.S. Dollars and Australian Dollars, the U.S. Dollar Equivalent of which is equal to
U.S.$10,000,000, may be made in U.S. Dollar Loans and/or Australian Dollar Loans to the Australia
Borrower by the Australia Lender.




          The proceeds of the Facility will be used to (i) finance the development, production,
distribution or acquisition of intellectual properties including feature films, television,
interactive media, music and video product and/or rights therein or thereto, (ii) operate physical
production facilities, (iii) acquire and operate television channels and internet distribution
platforms and (iv) for other general corporate purposes, including acquisitions, permitted stock
repurchases and dividends.




 









 








          Pursuant to the PA Credit Agreement, the PA Lender has agreed to make loans of up to
$66,000,000 to Lions Gate Pennsylvania, Inc., a Pennsylvania corporation (“LGPA”) to fund
the production of motion pictures and television productions filmed in Pennsylvania. A cash
collateral account, holding an amount equal to the principal amount of the outstanding loans made
by the PA Lender, is being maintained with the Administrative Agent. The relative rights of the
Group Lenders, the PA Lender and the Administrative Agent with respect to the Collateral are
governed by the intercreditor provisions set forth Annex I.




          To provide assurance for the repayment of the Loans and the other Obligations of the Borrowers
hereunder, the Borrowers will, among other things, provide or cause to be provided to the
Administrative Agent, for the benefit of itself, the Issuing Bank and the Lenders, the following
(each as more fully described herein):



(i) a guaranty of the Obligations by each of the Guarantors pursuant to Article 9 hereof;



(ii) a security interest in the Collateral from each of the Credit Parties pursuant to Article 8
hereof; and



(iii) a pledge by each of the Pledgors of the Pledged Securities owned by it pursuant to Article 10
hereof.




          Subject to the terms and conditions set forth herein, (i) the Administrative Agent is willing
to act as agent for the Lenders, (ii) the Issuing Bank is willing to issue the Letters of Credit,
(iii) each LGEI Lender is willing to make US. Dollar Loans to LGEI and Special Purpose Producers
and to participate in the Letters of Credit as provided herein, in an aggregate amount at any one
time outstanding not in excess of its Commitment hereunder, (iv) the UK Lender is willing to make
Sterling Loans and U.S. Dollar Loans to the UK Borrower and to participate in the Letters of Credit
as provided herein, in an aggregate amount at any one time outstanding not in excess of its
Commitment hereunder and (v) the Australia Lender is willing to make Australian Dollar Loans and
U.S. Dollar Loans to the Australia Borrower and to participate in the Letters of Credit as provided
herein, in an aggregate amount at any one time outstanding not in excess of its Commitment
hereunder.




          Accordingly, the parties hereto hereby agree as follows that, effective on the Closing Date,
the Existing Credit Agreement is amended and restated in its entirety to read as follows:




1. DEFINITIONS




          For the purposes hereof unless the context otherwise requires, all Section references herein
shall be deemed to correspond with Sections herein, the following terms shall have the meanings
indicated, all accounting terms not otherwise defined herein shall have the respective meanings
accorded to them under GAAP and all terms defined in the UCC and not otherwise defined herein shall
have the respective meanings accorded to them therein. For purposes hereof, all references herein
to “the date hereof” shall mean the date of this Agreement.




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Unless the context otherwise requires, any of the following terms may be used in the singular
or the plural, depending on the reference:




          “Acceptable Domestic Account Debtor” shall mean any Person listed as such on Schedule
1.2 hereto (as modified from time to time in accordance with Section 2.20).




          “Acceptable Foreign Account Debtor” shall mean any Person listed as such on Schedule
1.2 hereto (as modified from time to time in accordance with Section 2.20).




          “Acceptable L/C” shall mean an irrevocable letter of credit which (i) is in form and
on terms acceptable to the Administrative Agent, (ii) is payable in Dollars at an office of the
issuing or confirming bank in New York City, and (iii) is issued or confirmed by (a) any Person
that on the date of issuance or confirmation of the letter of credit, is a Group Lender; (b) any
commercial bank that has (or which is the principal operating subsidiary of a holding company which
has) as of the time such letter of credit is issued, public debt outstanding with a rating of at
least “A” (or the equivalent of an “A”) from one of the nationally recognized debt rating agencies;
or (c) any other bank which the Required Lenders may in their sole discretion determine to be of
acceptable credit quality.




          “Acceptable Major Account Debtor” shall mean any Person listed as such on Schedule 1.2
hereto (as modified from time to time in accordance with Section 2.20).




          “Acceptable Obligor” shall mean any of the Acceptable Domestic Account Debtors, the
Acceptable Foreign Account Debtors and the Acceptable Major Account Debtors.




          “Acceptable Tax Credit” shall mean (A) the amount that a Credit Party is entitled to
or can reasonably be expected to be entitled to receive as a refund of tax with respect to any tax
credit pursuant to the provisions of the law of any State in the United States administering tax
credit programs, the provisions of the federal law of the United States or the provisions of the
federal law of Canada or the law of any Canadian Province (an “Other Provincial Act”) or
the provisions of the law of the United Kingdom (“UK Law”) or the provisions of the law of
Australia (“Australia Law”) or the provisions of the law of any other jurisdiction
(“Other Foreign Law”), acceptable to the Administrative Agent, acting for itself, the
Issuing Bank and the Group Lenders, or, (B) if such Credit Party has entered into a definitive,
arms’ length, purchase and sale agreement for the sale of the tax credit to a third-party, such
lesser amount as may have been agreed by the Credit Party with the third-party in such definitive
purchase and sale agreement in respect of any such tax credits; in either case, which meets the
following criteria:



(i) the tax credit is in respect of an item of Product that has commenced principal photography and
that does not remain Uncompleted beyond the time period, if any, permitted under the applicable
State law, federal U.S. law, federal Canadian law, Other Provincial Act, U.K. Law, Australia Law or
Other Foreign Law with respect to such credit;



(ii) the Credit Party shall have delivered to the Administrative Agent the items listed in
Sections 5.20 and 5.23 hereof for the applicable item of Product to the extent required
thereunder;




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(iii) the Credit Party has applied for and received an eligibility certificate in respect
of such tax credit for such item of Product (if applicable) and has requested to be
provided with an estimated amount of the tax credit to which the Credit Party will be
entitled;



(iv) the amount of a refund of tax with respect to a tax credit that a Credit Party is
entitled or can reasonably be expected to be entitled to receive is net of any tax,
interest, penalty or other amount payable to any Governmental Authority by a Credit Party
under the applicable State law, federal U.S. law, federal Canadian law, Other Provincial
Act, U.K. Law, Australia Law or Other Foreign Law, as applicable, or any other amount
payable by the Credit Party to any Governmental Authority to which the credit can be or has
been applied by set-off or in any other manner whatsoever by any Governmental Authority;



(v) where the amount of a tax credit in respect of an item of Product or, in the case of a
television series, any one season of such series, exceeds the sum of U.S.$1,000,000, the
Credit Party has provided the Administrative Agent, on behalf of itself, the Issuing Bank
and the Group Lenders, with an independent accountant’s opinion/review letter in form and
substance satisfactory to the Administrative Agent confirming the estimated amount of the
tax credit;



(vi) the amount of a refund of tax with respect to a tax credit that a Credit Party is
entitled or can reasonably be expected to be entitled to receive is net of expenses
relating to the filing of the eligibility certificate with the applicable Governmental
Authority or any other filings or procedures necessary to receive such tax credit which
have already been paid prior to determination of the amount of such Acceptable Tax Credit;



(vii) the Administrative Agent (for the benefit of itself, the Issuing Bank and the Group
Lenders) has a first priority perfected security interest in the tax credit and notice of
such security interest in accordance with any applicable requirements of the applicable
State law, federal U.S. law, federal Canadian law, Other Provincial Act, U.K. Law,
Australia Law or Other Foreign Law, as applicable, and any other relevant Governmental
Authority, provided, however, that such requirement shall not apply if the
Credit Party has entered into a definitive, arms’ length, purchase and sale agreement for
the sale of the tax credit to a third-party; and



(viii) such other actions or requirements as the Administrative Agent or its counsel may
require;



provided, however, that (x) to the extent that circumstances arise or occur that
would cause the actual tax credit to be less than the amount that would be determined based on any
estimated amounts as set forth on any applications for any certificate described in clause (iii) of
this definition, the Acceptable Tax Credit shall be reduced to reflect the revised estimate and (y)
an Acceptable Tax Credit shall cease to be an Acceptable Tax Credit (A) if the Credit Party has not
filed its return of income and all other certificates, forms and documents required under the
applicable legislation to be filed together therewith in order to claim such tax credit within 6
months from the end of the tax year of such Credit Party; provided, however, that
such requirement shall not apply if such Credit Party has entered into a definitive, arms’ length,




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purchase and sale agreement for the sale of the tax credit to a third-party, or (B) if the relevant
Governmental Authority has (i) denied the Credit Party’s application of the applicable certificate
set forth in clause (iii) of this definition, (ii) not issued the applicable certificate within
fifteen months following the Credit Party’s application thereof or (iii) revoked or notified the
Credit Party of their intention to revoke such certificate.




          “Acquisition” shall mean any purchase or acquisition of (i) any film or television
library, (ii) all or substantially all of the assets of any Person, or (iii) 50% or more of the
outstanding stock or other equity interests of any Person.




          “Administrative Agent” shall mean JPMorgan Chase Bank, in its capacity as agent for
the Lenders hereunder or such successor Administrative Agent as may be appointed pursuant to
Section 12.11 hereof.




          “Affiliate” shall mean any Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, another Person. For purposes of this definition, a
Person shall be deemed to be “controlled by” another Person if such latter Person possesses,
directly or indirectly, the power to direct or cause the direction of the management and policies
of such controlled Person whether by contract or otherwise.




          “Affiliated Group” shall mean a group of Persons, each of which is an Affiliate (other
than by reason of having common directors or officers) of some other Person in the group.




          “Allowable Amount” shall mean, with respect to any Acceptable Obligor, such amount as
may be specified on Schedule 1.2 hereto (as applicable) as the maximum aggregate exposure for such
Acceptable Obligor (as modified from time to time in accordance with Section 2.20 hereof).




          “Alternate Base Rate” shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100th of 1%) equal to the greater of (a) the Prime Rate in effect on such
day and (b) the Federal Funds Effective Rate in effect for such day plus 1/2 of 1%. For purposes
hereof, “Prime Rate” shall mean the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its principal office in New York
City. “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by the Administrative Agent
from three (3) Federal funds brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including
the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance
with the terms hereof, the Alternate Base Rate shall be determined without regard to clause (b) of
the first sentence of this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on




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the effective date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.




          “Alternate Base Rate Loan” shall mean a Loan based on the Alternate Base Rate in
accordance with the provisions of Article 2 hereof.




          “Amendment No. 11” shall mean that certain Amendment No. 11 to the Existing Credit
Agreement dated as of April 10, 2008.




          “Annex I” shall mean Annex I attached hereto, which shall be in the form attached to
Amendment No. 11.




          “Applicable Law” shall mean all provisions of statutes, rules, regulations and orders
of the United States or Canada, any state or province thereof or municipality therein or of any
foreign governmental body or of any regulatory agency applicable to the Person in question, and all
orders and decrees of all courts and arbitrators in proceedings or actions in which the Person in
question is a party.




          “Applicable Margin” shall mean (i) in the case of U.S. Dollar Loans that are Alternate
Base Rate Loans, 1.25% per annum, (ii) in the case of U.S. Dollar Loans that are Eurodollar Loans,
2.25% per annum, (iii) in the case of Sterling Eurodollar Loans, 2.25% per annum and (iv) in the
case of Australian Dollar Eurodollar Loans, 2.25% per annum.




          “Approved Completion Guarantor” shall mean a financially sound and reputable
completion guarantor approved by the Administrative Agent. The Administrative Agent hereby
pre-approves as a completion guarantor (i) Fireman’s Fund Insurance Company, acting through its
agent, International Film Guarantors, L.P. (the general partner of which is International Film
Guarantors, Inc.) and (ii) Film Finances, Inc. and its Affiliates (including Film Finances Canada
Ltd.) that are insured under the same Lloyds of London insurance policies as Film Finances, Inc.
(only to the extent the completion guaranty is accompanied by a Lloyds of London “cut-through
endorsement”); provided, however, that any such pre-approval may be revoked by the
Administrative Agent if deemed appropriate in its sole discretion or if so instructed by the
Required Lenders, at any time upon 30 days prior written notice to the Borrowers; but
further, provided, that such pre-approval may not be revoked with regard to an item
of Product if a Completion Guaranty has already been issued for such item of Product.




          “Assignment and Acceptance” shall mean an agreement substantially in the form of
Exhibit J hereto or such other form as is acceptable to the Administrative Agent, executed by the
assignor, assignee and other parties as contemplated thereby.




          “Australia Borrower Commitment” shall mean the commitment of the Australia Lender to
make Loans to the Australia Borrower (in accordance with Section 2.22) in either U.S. Dollars or
Australian Dollars from the Closing Date through the Commitment Termination Date up to an aggregate
amount at any one time outstanding, such that the sum of the outstanding amount of U.S. Dollar
Loans to the Australia Borrower plus the U.S. Dollar Equivalent of outstanding Australian Dollar
Loans does not at any time exceed the Australia Sublimit, as such amount may be reduced from time
to time in accordance with the terms of this Credit Agreement.




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          “Australia Borrower Facility” shall mean a revolving credit facility providing for the
making of Australian Dollar Loans and/or U.S. Dollar Loans to the Australia Borrower in accordance
with the Australia Borrower Commitment.




          “Australia Borrower Loans” shall mean U.S. Dollar Loans and/or Australian Dollar
Loans, as applicable, made to the Australia Borrower in accordance with Section 2.22 hereof.




          “Australia Lender” shall mean (i) JPMorgan Chase Bank, N.A. or one of its Affiliates,
and (ii) any assignee of an Australia Lender pursuant to Section 13.3 hereof.




          “Australia Sublimit” shall mean U.S.$10,000,000.




          “Australian Dollar” and “AU$” shall mean lawful money of Australia.




          “Australian Dollar Clearing Account” shall mean such Australian Dollar denominated
account of the Administrative Agent as may be designated by the Administrative Agent from time to
time.




          “Australian Dollar Eurodollar Loan” shall mean an Australian Dollar Loan based on the
Australian Dollar LIBO Rate in accordance with the provisions of Article 2 hereof.




          “Australian Dollar LIBO Rate” shall mean, with respect to the Interest Period for an
Australian Dollar Eurodollar Loan, an interest rate per annum equal to the BBA Interest Settlement
Rate per annum at which deposits in Australian Dollars are offered in London, England to prime
banks in the London interbank market for such Interest Period as displayed on Telerate Screen page
3750 as of 11:00 a.m. (London time) two Business Days before the first day of such Interest Period
in an amount substantially equal to such Australian Dollar Eurodollar Loan comprising part of such
Borrowing to be outstanding during such Interest Period. Telerate Screen page 3750 means the
display designated as page 3750 on the Dow Jones Telerate Service (or such other page as may
replace page 3750 on that service or such other service as may be nominated by the BBA as the
information vendor for the purpose of displaying BBA Interest Settlement Rates for deposits in
Australian Dollars). If such rate does not appear on Telerate Screen page 3750 on any relevant
date for the determination of the Australian Dollar LIBO Rate, the Australian Dollar LIBO Rate
shall be an interest rate equal to the rate per annum of the average (rounded upward to the nearest
whole multiple of 1/100 of 1% per annum, if such average is not such a multiple) of the rate per
annum at which deposits in Australian Dollars are offered to the principal office of the
Administrative Agent in London, England by prime banks in the London interbank market at 11:00 a.m.
(London time) two Business Days before the first day of such Interest Period in an amount
substantially equal to the Australian Dollar Eurodollar Loan comprising part of such Borrowing to
be outstanding during such Interest Period




          “Australian Dollar Loans” shall mean the loans made hereunder denominated in
Australian Dollars in accordance with Section 2.22 hereof.




          “Authorized Officer” shall mean the Vice-Chairman, the Chief Executive Officer or the
Chief Financial Officer of a Borrower.




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          “Bankruptcy and Insolvency Act” shall mean the Bankruptcy and Insolvency Act, R.S.C.
1985, c. B-3, as heretofore and hereafter amended.




          “Bankruptcy Code” shall mean the Bankruptcy Reform Act of 1978, as heretofore and
hereafter amended, as codified at 11 U.S.C. § 101 et seq.




          “Board” shall mean the Board of Governors of the Federal Reserve System of the United
States of America.




          “Borrower” shall mean LGEI, except that (i) with respect to the UK Borrower Loans,
Borrower shall mean the UK Borrower and (ii) with respect to the Australia Borrower Loans, Borrower
shall mean the Australia Borrower; provided, however, that for the purposes of
Articles 8, 9 and 12 hereof, the term “Borrower” shall also include the PA Borrowers in respect of
the PA Obligations.




          “Borrowing” shall mean a group of Loans of a single Interest Rate Type and as to which
a single Interest Period is in effect on a single day.




          “Borrowing Base” shall mean, at any date for which the amount thereof is to be
determined, an amount equal to the aggregate (without double counting) of the following:



(i) 100% of Eligible Receivables from Acceptable Major Account Debtors, plus



(ii) 100% of Eligible L/C Receivables, plus



(iii) 90% of Eligible Receivables from Acceptable Domestic Account Debtors, plus




(iv) 85% of Eligible Receivables from Acceptable Foreign Account Debtors, plus



(v) 75% of Acceptable Tax Credits for which a Credit Party has not received the applicable
certificate referred to in clause (iii) of the definition of “Acceptable Tax Credit”, and 85% of
Acceptable Tax Credits thereafter, plus



(vi) 50% of Other Domestic Receivables, plus



(vii) 50% of Other Foreign Receivables, plus



(viii) 50% of the Eligible Library Amount, plus



(ix) 100% of amounts held in the Cash Collateral Account(s) (other than cash collateral provided in
connection with the Pennsylvania Regional Financing Arrangement), plus



(x) the lesser of fifty percent (50%) of the book value of physical videocassette inventory or
U.S.$10,000,000, plus



(xi) in the case of an item of Product which is intended for domestic theatrical release, the Home
Video Credit plus the Pay Television Credit plus the Free Television Credit; provided,
however, that if any such Product has not had a general theatrical release in the United
States




- 8 -









 







within twelve months of its Completion, the Borrowers shall no longer be entitled to include the
foregoing credits in respect of such item of Product in the Borrowing Base, plus



(xii) in the case of an item of Product which is intended as a direct to video release, the Direct
To Video Credit; provided, however, that if such Product has not been released in
the domestic home video market within twelve months of its Completion, the Borrowers shall no
longer be entitled to include the foregoing credits in respect of such item of Product in the
Borrowing Base, plus



(xiii) in the case of an item of Product which is intended for foreign exploitation, the Foreign
Rights Credit; provided, however, that if such item of Product has not been
released in a major foreign territory within 12 months of its Completion, the Borrowers shall no
longer be entitled to include the foregoing credits in respect of such item of Product in the
Borrowing Base, plus



(xiv) in the case of an item of Product that has been released on at least 600 screens, 50% of any
Credit Parties’ share of the “P&A” expenditures for such item of Product; provided, that
such amount shall be reduced by the theatrical rentals for such item of Product; provided,
further, that, in any event, such credit shall expire upon the earlier of (a) the home
video “street date” or (b) six months after the theatrical release date of such item of Product,
minus



(xv) to the extent not otherwise deducted in computing the Borrowing Base, the aggregate amount of
all accrued but unpaid residuals owed to any trade guild with respect to any item of Product, to
the extent that the obligation of any Credit Party to pay such residuals is secured by a security
interest in such item of Product or rights therein or proceeds thereof, which security interest is
not subordinated to the security interests of the Group Lenders (but the amount deducted with
respect to any such item of Product shall not exceed the amount included in the Borrowing Base
attributable to such item of Product).



provided, however, that



(a) the amount included in the Borrowing Base at any time for Other Domestic Receivables and Other
Foreign Receivables (in each case, other than theatrical receivables) shall not exceed
U.S.$30,000,000 in the aggregate for all such receivables or U.S.$500,000 for any domestic obligor
or U.S.$500,000 for any foreign obligor;



(b) the portion of the Borrowing Base attributable at any time to each item of Product which has
not yet been Completed shall not exceed the Credit Parties’ investment in such item of Product, or
if pursuant to the other provisions hereof a Completion Guaranty is required for such item of
Product, such lesser amount as would be payable to the Administrative Agent by the completion
guarantor under such Completion Guaranty in the event such Product is not timely Completed and
delivered to the Borrowers (except that if a Letter of Credit is issued hereunder in order to
support the applicable Credit Party’s minimum payment obligation to acquire distribution rights in
an item of Product, amounts attributable to such rights may be included in the Borrowing Base (even
though the item of Product has not yet been Completed) but only if (A) proof of Completion of the
Item of Product must be presented in order to draw under the Letter of Credit and (B) the portion
of the Borrowing Base attributable to such Item of Product does not exceed the amount of such
Letter of Credit for such Item of Product);




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(c) the portion of the Borrowing Base attributable to Acceptable Tax Credits shall not exceed 10%
of the total Borrowing Base;



(d) no amounts shall be included in the Borrowing Base which are attributable to an item of Product
or right in which a Credit Party cannot warrant sufficient title to the underlying rights;



(e) no amount shall be included in the Borrowing Base unless the Administrative Agent (for the
benefit of itself, the Issuing Bank and the Group Lenders) has a first priority perfected security
interest in such amounts except for amounts attributable to items of Product for which a guild has
a first priority security interest pursuant to an intercreditor agreement entered into between such
guild and the Administrative Agent in accordance with Section 6.2(e) hereof;



(f) no additional amounts attributable to Acceptable Tax Credits shall be included in the Borrowing
Base after six months before the scheduled Maturity Date;



(g) the portion of the Borrowing Base attributable to any of the Home Video Credit, Pay Television
Credit, Free Television Credit, Direct to Video Credit or Foreign Rights Credit shall not exceed
90% of the Production Exposure for all such items of Product to which such credits relate;



(h) the portion of the Borrowing Base attributable to items of Product, Eligible Receivables, Other
Domestic Receivables, Other Foreign Receivables or any other items owned by the UK Borrower or its
Subsidiaries, in the aggregate, shall not exceed the lesser of (A) the UK Sublimit or (B) the
principal amount of Loans outstanding to the UK Borrower;



(i) the portion of the Borrowing Base attributable to items of Product, Eligible Receivables, Other
Domestic Receivables, Other Foreign Receivables or any other items owned by the Australia Borrower
or its Subsidiaries, in the aggregate, shall not exceed the lesser of (A) the Australia Sublimit or
(B) the principal amount of Loans outstanding to the Australia Borrower; and



(j) no Borrowing Base credit shall be given for items of Product, Eligible Receivables, Other
Domestic Receivables, Other Foreign Receivables or any other items owned by the Australia Borrower
or its Subsidiaries unless and until the Administrative Agent has been granted a satisfactory
perfected first priority security interest under Australian law in all of the assets of the
Australia Borrower or its Subsidiaries, as applicable.




          “Borrowing Base Certificate” shall have the meaning given to such term in Section
5.1(d) hereof.




          “Borrowing Certificate” shall mean a borrowing certificate, substantially in the form
of Exhibit H hereto, to be delivered by the Borrowers to the Administrative Agent in connection
with each Borrowing.




          “Budgeted Negative Cost” shall mean, with respect to any item of Product, the amount
of the cash budget (stated in U.S. Dollars) for such item of Product including all costs
customarily included in connection with the acquisition of all underlying literary, musical and
other rights with respect to such item of Product and in connection with the preparation,




- 10 -









 







production and completion of such item of Product, including costs of materials, equipment,
physical properties, personnel and services utilized in connection with such item of Product, both
“above-the-line” and “below-the-line”, any Completion Guaranty fee, and all other items customarily
included in negative costs, including finance charges and interest expense, but excluding
production fees, overhead charges or other fees, charges or costs payable to a Credit Party, except
to the extent such payments to a Credit Party are reimbursements for production or development
costs advanced by a Credit Party to a Person that is not a Credit Party.




          “Business Day” shall mean any day other than a Saturday, Sunday or other day on which
banks are required or permitted to close in the State of New York or the State of California;
provided, however, that when used in connection with a Eurodollar Loan, the term
“Business Day” shall also exclude any day on which banks are not open for dealings (i) in Dollar
deposits on the London Interbank Market or (ii) Sterling and Australian Dollar deposits on the
London Interbank Market or the principal financial center of the country in which payment or
purchase of such currency can be made.




          “Capital Expenditures” shall mean, with respect to any Person for any period, the sum
of (i) the aggregate of all expenditures (whether paid in cash or accrued as a liability) by such
Person during that period which, in accordance with GAAP, are or should be included in “additions
to property, plant or equipment” or similar items included in cash flows (including Capital Leases)
and (ii) to the extent not covered by clause (i) hereof, the aggregate of all expenditures properly
capitalized in accordance with GAAP by such Person to acquire, by purchase or otherwise, the
business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any
other Person (other than the portion of such expenditures allocable in accordance with GAAP to net
current assets or which is allocable to the acquisition of items of Product).




          “Capital Lease”, as applied to any Person, shall mean any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or
should be accounted for as a capital lease on the balance sheet of that Person.




          “Cash Collateral Accounts” shall have the meaning given to such term in Section 11.1
hereof.




          “Cash Equivalents” shall mean (i) marketable securities issued, or directly and fully
guaranteed or insured, by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is pledged in support
thereof) having maturities of not more than twelve months from the date of acquisition, (ii) time
deposits, demand deposits, certificates of deposit, acceptances or prime commercial paper or
repurchase obligations for underlying securities of the types described in clause (i), entered into
with any Group Lender or any commercial bank having a short-term deposit rating of at least A-2 or
the equivalent thereof by Standard & Poor’s Corporation or at least P-2 or the equivalent thereof
by Moody’s Investors Service, Inc., (iii) commercial paper with a rating of A-1 or A-2 or the
equivalent thereof by Standard & Poor’s Corporation or P-1 or P-2 or the equivalent thereof by
Moody’s Investors Service, Inc. and in each case maturing within twelve months after the date of
acquisition, (iv) money market mutual funds, or (v) other short-term liquid investments approved in
writing by the Administrative Agent.




- 11 -









 








          “CCQ” shall mean the Civil Code of Quebec as in effect in the province of Quebec on
the date of execution of this Credit Agreement (as amended from time to time).




          “Chain of Title” shall have the meaning given to such term in Section 5.20 hereof.




          “Change in Control” shall mean (i) any Person or group (such term being used as
defined in Section 13(e) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
Persons or groups (or any Subsidiary of such Person or groups) acceptable to the Administrative
Agent, acquires ownership or control of in excess of 20% of equity securities having voting power
to vote in the election of the Board of Directors of LGEC either on a fully diluted basis or based
solely on the voting stock then outstanding or (ii) if at any time, individuals who as of the
Closing Date constituted the Board of Directors of LGEC (together with any new directors whose
election by such Board of Directors or whose nomination for election by the shareholders of LGEC,
as the case may be, was approved by a vote of the majority of the directors then still in office
who were either directors at the Closing Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the Board of Directors of
LGEC then in office or (iii) any change of control as defined in the Indenture for the Convertible
Senior Subordinated Notes.




          “Change in Management” shall mean that (a) any three of (i) Jon Feltheimer, (ii)
Michael Burns, (iii) Joseph Drake or (iv) Steven Beeks (a “Key Manager”) shall cease for
any reason, including, without limitation, termination of employment, death or disability (the term
“disability” or “disabled” as used herein meaning an inability continuing for one hundred and
eighty (180) consecutive days (the “Disability Period”) to materially perform the functions
and services currently being performed by such Person), to materially perform the functions and
services currently being performed for the Borrowers by such Person and (b) the Borrowers shall
fail, for a period of ninety (90) consecutive days following the last day of the Disability Period
in which a Key Manager may be considered disabled or the day on which a Key Manager shall have
otherwise ceased to materially perform his executive functions with the Borrowers as aforesaid, to
replace such Key Manager with an individual acceptable to the Required Lenders in their sole
discretion. Any replacement for a Key Manager shall be deemed acceptable to the Required Lenders
unless, within 30 days after receiving a written notice from the Borrowers containing the name of
the proposed replacement, the Administrative Agent notifies the Borrowers in writing that the
Required Lenders object to such replacement.




          “Clearing Account” shall mean the account of the Administrative Agent maintained at
the office of JPMorgan Chase Bank, Loan and Agency Services Group, 10 South Dearborn, Floor 7,
Chicago, Illinois 60603, Attention: LaTanya Driver, Account Name: Loan Processing DP, Account No.:
9008113381c2673, Ref: Lions Gate Entertainment.




          “Closing Date” shall mean the date on which the conditions precedent set forth in
Section 4.1 hereof have been satisfied or waived.




          “Code” shall mean the Internal Revenue Code of 1986 and the rules and regulations
issued thereunder, as now and hereafter in effect, as codified at 26 U.S.C. § 1 et
seq. or any successor provision thereto.




- 12 -









 








          “Collateral” shall mean with respect to each Credit Party, all of such Credit Party’s
right, title and interest in and to all personal property, tangible and intangible, wherever
located or situated and whether now owned, presently existing or hereafter acquired or created,
including, but not limited to, all goods, accounts, instruments, intercompany obligations, contract
rights, partnership and joint venture interests, documents, chattel paper, general intangibles,
goodwill, equipment, machinery, inventory, investment property, copyrights, trademarks, trade
names, insurance proceeds, cash, deposit accounts and the Pledged Securities, and any proceeds
thereof, products thereof or income therefrom, further including but not limited to, all of such
Credit Party’s right, title and interest in and to each and every item and type of Product, the
scenario, screenplay or script upon which an item of Product is based, all of the properties
thereof, tangible and intangible, and all domestic and foreign copyrights and all other rights
therein and thereto, of every kind and character, whether now in existence or hereafter to be made
or produced, and whether or not in possession of such Credit Party, including with respect to each
and every item of Product and without limiting the foregoing language, each and all of the
following particular rights and properties (to the extent they are now owned or hereafter created
or acquired by such Credit Party):



(i) all scenarios, screenplays and/or scripts at every stage thereof;



(ii) all common law and/or statutory copyright and other rights in all literary and other
properties (hereinafter called “said literary properties”) which form the basis of such
item of Product and/or which are or will be incorporated into such item of Product, all component
parts of such item of Product consisting of said literary properties, all motion picture rights in
and to the story, all treatments of said story and said literary properties, together with all
preliminary and final screenplays used and to be used in connection with such item of Product, and
all other literary material upon which such item of Product is based or from which it is adapted;



(iii) all motion picture rights in and to all music and musical compositions used and to be used in
such item of Product, if any, including, each without limitation, all rights to record, rerecord,
produce, reproduce or synchronize all of said music and musical compositions in and in connection
with motion pictures;



(iv) all tangible personal property relating to such item of Product, including, without
limitation, all exposed film, developed film, positives, negatives, prints, positive prints, answer
prints, special effects, preparing materials (including interpositives, duplicate negatives,
internegatives, color reversals, intermediates, lavenders, fine grain master prints and matrices,
and all other forms of pre-print elements), sound tracks, cutouts, trims and any and all other
physical properties of every kind and nature relating to such item of Product whether in completed
form or in some state of completion, and all masters, duplicates, drafts, versions, variations and
copies of each thereof, in all formats whether on film, videotape, disk or other optical or
electronic media or otherwise and all music sheets and promotional materials relating to such item
of Product (collectively, the “Physical Materials”);



(v) all collateral, allied, subsidiary and merchandising rights appurtenant or related to such item
of Product including, without limitation, the following rights: all rights to produce remakes,
sequels or prequels to such item of Product, based upon such item of Product, said literary
properties or the theme of such item of Product and/or the text or any part of said literary




- 13 -









 







properties; all rights throughout the world to broadcast, transmit and/or reproduce by means of
television (including commercially sponsored, sustaining and subscription or “pay” television) or
by streaming video or by other means over the internet or any other open or closed physical or
wireless network or by any process analogous to any of the foregoing, now known or hereafter
devised, such item of Product or any remake, sequel or prequel to the item of Product; all rights
to produce primarily for television or similar use, a motion picture or series of motion pictures,
by use of film or any other recording device or medium now known or hereafter devised, based upon
such item of Product, said literary properties or any part thereof, including, without limitation,
based upon any script, scenario or the like used in such item of Product; all merchandising rights
including, without limitation, all rights to use, exploit and license others to use and exploit any
and all commercial tie-ups of any kind arising out of or connected with said literary properties,
such item of Product, the title or titles of such item of Product, the characters of such item of
Product and/or said literary properties and/or the names or characteristics of said characters and
including further, without limitation, any and all commercial exploitation in connection with or
related to such item of Product, any remake, sequel or prequel thereof and/or said literary
properties;



(vi) all statutory copyrights, domestic and foreign, obtained or to be obtained on such item of
Product, together with any and all copyrights obtained or to be obtained in connection with such
item of Product or any underlying or component elements of such item of Product, including, in each
case without limitation, all copyrights on the property described in subparagraphs (i) through (v)
inclusive, of this definition, together with the right to copyright (and all rights to renew or
extend such copyrights) and the right to sue in the name of any of the Credit Parties for past,
present and future infringements of copyright;



(vii) all insurance policies and completion guaranties connected with such item of Product and all
proceeds which may be derived therefrom;



(viii) all rights to distribute, sell, rent, license the exhibition of and otherwise exploit and
turn to account such item of Product, the Physical Materials, the motion picture rights in and to
the story and/or other literary material upon which such item of Product is based or from which it
is adapted, and the music and musical compositions used or to be used in such item of Product;



(ix) any and all sums, proceeds, money, products, profits or increases, including money profits or
increases (as those terms are used in the UCC or otherwise) or other property obtained or to be
obtained from the distribution, exhibition, sale or other uses or dispositions of such item of
Product or any part of such item of Product, including, without limitation, all sums, proceeds,
profits, products and increases, whether in money or otherwise, from the sale, rental or licensing
of such item of Product and/or any of the elements of such item of Product including, without
limitation, from collateral, allied, subsidiary and merchandising rights, and further including,
without limitation, all monies held in any Collection Account;



(x) the dramatic, nondramatic, stage, television, radio and publishing rights, title and interest
in and to such item of Product, and the right to obtain copyrights and renewals of copyrights
therein;




- 14 -









 







(xi) the name or title of such item of Product and all rights of such Credit Party to the use
thereof, including, without limitation, rights protected pursuant to trademark, service mark,
unfair competition and/or any other applicable statutes, common law, or other rule or principle of
law;



(xii) any and all contract rights and/or chattel paper which may arise in connection with such item
of Product;



(xiii) all accounts and/or other rights to payment which such Credit Party presently owns or which
may arise in favor of such Credit Party in the future, including, without limitation, any refund or
rebate in connection with a completion guaranty or otherwise, all accounts and/or rights to payment
due from Persons in connection with the distribution of such item of Product, or from the
exploitation of any and all of the collateral, allied, subsidiary, merchandising and other rights
in connection with such item of Product;



(xiv) any and all “general intangibles” (as that term is defined in the UCC) not elsewhere included
in this definition, including, without limitation, any and all general intangibles consisting of
any right to payment which may arise in connection with the distribution or exploitation of any of
the rights set out herein, and any and all general intangible rights in favor of such Credit Party
for services or other performances by any third parties, including actors, writers, directors,
individual producers and/or any and all other performing or nonperforming artists in any way
connected with such item of Product, any and all general intangible rights in favor of such Credit
Party relating to licenses of sound or other equipment, or licenses for any photograph or
photographic or other processes, and any and all general intangibles related to the distribution or
exploitation of such item of Product including general intangibles related to or which grow out of
the exhibition of such item of Product and the exploitation of any and all other rights in such
item of Product set out in this definition;



(xv) any and all goods including, without limitation, inventory (as that term is defined in the
UCC) which may arise in connection with the creation, production or delivery of such item of
Product and which goods pursuant to any production or distribution agreement or otherwise are owned
by such Credit Party;



(xvi) all and each of the rights, regardless of denomination, which arise in connection with the
acquisition, creation, production, completion of production, delivery, distribution, or other
exploitation of such item of Product, including, without limitation, any and all rights in favor of
such Credit Party, the ownership or control of which are or may become necessary or desirable, in
the opinion of the Administrative Agent, in order to complete production of such item of Product in
the event that the Administrative Agent exercises any rights it may have to take over and complete
production of such item of Product;



(xvii) any and all documents issued by any pledgeholder or bailee with respect to such item of
Product or any Physical Materials (whether or not in completed form) with respect thereto;



(xviii) any and all Collection Accounts or other bank accounts (other than any Production Accounts)
established by such Credit Party with respect to such item of Product;




- 15 -









 







(xix) any and all rights of such Credit Party under any Distribution Agreements relating to such
item of Product; and



(xx) any and all rights of such Credit Party under contracts relating to the production or
acquisition of such item of Product, including but not limited to, all contracts which have been
delivered to the Administrative Agent pursuant to this Credit Agreement.



Notwithstanding the foregoing or any contrary provision herein or in any other Fundamental
Document, Collateral shall not include (i) the Excluded Assets, (ii) the issued and outstanding
shares in any Controlled Foreign Subsidiary other than a first tier Controlled Foreign Subsidiary,
or (iii) more than 65% of the issued and outstanding shares in any Controlled Foreign Subsidiary
owned directly by a Credit Party which is not a Controlled Foreign Subsidiary.




          “Collection Account” shall have the meaning given to such term in Section 8.3(a)
hereof.




          “Commitment” shall mean the LGEI Commitment, the UK Borrower Commitment and/or the
Australia Borrower Commitment, as applicable.




          “Commitment Fee” shall have the meaning given to such term in Section 2.8(a) hereof.




          “Commitment Termination Date” shall mean (i) July 25, 2013 or (ii) such earlier date
on which the Commitments shall terminate in accordance with Section 2.9 or Article 7 hereof.




          “Complete” or “Completed” or “Completion” shall mean with respect to
any item of Product, that (A) either (i) sufficient elements have been delivered by the applicable
Borrower to, and accepted, deemed or determined to be accepted and/or exploited by, a Person (other
than the Borrowers or Affiliates thereof) to permit such Person to exhibit the item of Product in
the theatrical or other medium for which the item of Product is intended for initial exploitation
or (ii) the applicable Borrower has certified to the Administrative Agent that an independent
laboratory has in its possession a complete final 35 mm or 70 mm (or other size which has become
standard in the industry) composite positive print, video master or other equivalent master copy of
the item of Product as finally cut, main and end titled, edited, scored and assembled with sound
track printed thereon in perfect synchronization with the photographic action and fit and ready for
exhibition and distribution in the theatrical or other medium for which the item of Product is
intended for initial exploitation, provided if such certification shall not be verified to the
Administrative Agent by such independent laboratory within 20 Business Days after a request by the
Administrative Agent for verification, such item of Product shall revert to being Uncompleted until
the Administrative Agent receives such verification, and (B) if such item of Product was acquired
by a Credit Party from a third party, the entire acquisition price or minimum advance shall have
been paid to the extent then due and there is no condition or event (including, without limitation,
the payment of money not yet due, except to the extent that an amount sufficient to make such
payment has been reserved from availability under both the Borrowing Base and the unused
Commitments hereunder) the occurrence of which might result in such Credit Party losing any of its
rights in such item of Product.




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          “Completion Guaranty” shall mean with respect to any item of Product a completion
guaranty, in form and substance satisfactory to the Administrative Agent, issued by an Approved
Completion Guarantor, which (i) names the Administrative Agent (for the benefit of the
Administrative Agent, the Issuing Bank and the Group Lenders) or the applicable outside production
financier to the extent such item of Product is financed in accordance with Section 6.1(f) hereof
as a beneficiary thereof to the extent of the applicable Credit Party’s financial interest in such
item of Product and (ii) guarantees that such item of Product will be Completed in a timely manner,
or else payment made to the Administrative Agent (on behalf of the Administrative Agent, the
Issuing Bank and the Group Lenders) of an amount at least equal to the aggregate amount expended on
the production of such item of Product by, or for the account of, the applicable Credit Party
plus interest on, and other bank charges with respect to, such amount.




          “Consolidated Subsidiaries” shall mean all Subsidiaries of a Person which are required
or permitted to be consolidated with such Person for financial reporting purposes in accordance
with GAAP.




          “Contribution Agreement” shall mean the contribution agreement substantially in the
form of Exhibit G hereto, as the same may be amended, supplemented or otherwise modified, renewed
or replaced from time to time.




          “Controlled Foreign Subsidiary” shall mean a Subsidiary that is a “controlled foreign
corporation” as defined in Section 957(a) of the Code or any successor provision thereto.




          “Convertible Senior Subordinated Notes” shall mean (i) LGEI’s 2.9375% Convertible
Senior Subordinated Notes due 2024 which were issued in October 2004 and (ii) LGEI’s 3.625%
Convertible Subordinated Notes due 2025 which were issued in February 2005.




          “Copyright Security Agreement” shall mean a Copyright Security Agreement,
substantially in the form of Exhibit C-1 hereto, as the same may be amended, supplemented or
otherwise modified, renewed or replaced from time to time by delivery of a Copyright Security
Agreement Supplement or otherwise.




          “Copyright Security Agreement Supplement” shall mean a Copyright Security Agreement
Supplement substantially in the form of Exhibit C-2 hereto.




          “Credit Exposure” shall mean, without duplication, with respect to any Group Lender,
the sum of such Group Lender’s (i) aggregate principal amount of outstanding Loans hereunder and
under Special Purpose Producer Credit Agreements, (ii) Pro Rata Share of the then current L/C
Exposure, and (iii) Pro Rata Share of the unused amount of the Commitment then in effect.




          “Credit Parties” shall mean the Borrowers and Guarantors and “Credit Party”
means any one of them.




          “Currency Agreement” shall mean any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar agreement designed to
protect a Credit Party against fluctuations in currency values.




- 17 -









 








          “Deed of Debenture” shall mean a deed of debenture substantially in the form of
Exhibit O or such other form as may be acceptable to the Administrative Agent.




          “Default” shall mean any event, act or condition which with notice or lapse of time,
or both, would constitute an Event of Default.




          “Designated Picture” shall mean any project for the production of a theatrical feature
motion picture, which meets the following criteria: (a) is not yet Completed; (b) for which a
Credit Party will be the initial copyright owner or will be acquiring the copyright upon
Completion, except to the extent otherwise approved by the Administrative Agent pursuant to Section
4.3(e); (c) is being produced by a Credit Party or a Special Purpose Producer; (d) has a Budgeted
Negative Cost which would not result in a violation of the covenants herein if produced by a Credit
Party; (e) over which a Credit Party has meaningful direct or indirect budgetary or artistic
control; and (f) has been declared to the Administrative Agent as a “Designated Picture” and has
satisfied the conditions precedent for Loans under the Special Production Tranche set forth in
Section 4.3 hereof.




          “Direct to Video Credit” shall mean with respect to each item of Product that is
intended for direct-to-video release, an amount equal to 40% of the Budgeted Negative Cost
therefor, or such lesser amount as the Borrowers determine will be received by them from both the
video distribution and television distribution of such item of Product worldwide; provided however,
that no Direct To Video Credit will be included in the Borrowing Base with respect to any item of
Product prior to its Completion except (i) for items of Product being funded under the Special
Production Tranche and (ii) for items of Product for which a Letter of Credit is issued in order to
support the Borrowers’ minimum payment obligation to acquire distribution rights in such item of
Product; provided further that such credit shall be reduced dollar-for-dollar by the amount of any
advance or other payment paid, or contractually committed to be paid, to any Credit Party with
respect to both the video and television distribution of such item of Product; provided further
that such credit shall be eliminated with respect to an item of Product twenty-four (24) months
after Completion.




          “Distribution Agreements” shall mean (i) any and all agreements entered into by a
Credit Party pursuant to which such Credit Party has sold, leased, licensed or assigned
distribution rights or other exploitation rights to any item of Product to an un-Affiliated Person
and (ii) any and all agreements hereafter entered into by a Credit Party pursuant to which such
Credit Party sells, leases, licenses or assigns distribution rights or other exploitation rights to
any item of Product to an un-Affiliated Person.




          “Eligible L/C Receivable” shall have the same definition as an Eligible Receivable
except that (i) an Acceptable L/C shall have been delivered to the Administrative Agent for the
full amount of the receivable and (ii) such receivable need not be with an Acceptable Obligor.




          “Eligible Library Amount” shall be (x) [REDACTED] as of the Closing Date and (y)
thereafter, the aggregate of the amounts for the various components of the Credit Parties’ library,
determined by an independent consultant selected and paid for by the Borrowers and approved by the
Administrative Agent in its reasonable discretion exercised in good faith using




- 18 -









 







methodology consistent with LGEI’s March 21, 2007 valuation without double counting for items
of Product that are receiving other credit in the Borrowing Base on an annual basis and on an
interim basis at the Administrative Agent’s request no more than once a year and shall be
accompanied by a variance analysis of the value of such Eligible Library Amount against the
Eligible Library Amount for the preceding period; provided, however, that (i) there
will be interim reductions to the Eligible Library Amount to reflect decreases, if any, in the
remaining value of unsold library rights resulting from significant library dispositions during
such interim period (e.g., any single agreement or series of related agreements pertaining
to the licensing, distribution or sale of library product providing for aggregate payments
(including reasonably estimated contingent payments) to LGEC or a Subsidiary of LGEC in excess of
U.S.$20,000,000); and (ii) the Eligible Library Amount may be increased in the case of a
significant library acquisition upon delivery of a supplemental valuation report meeting the above
requirements.




          “Eligible Pick-Up Party” means LGEI, LGF, another principal operating Subsidiary of
LGEI satisfactory to the Administrative Agent, or another Subsidiary of LGEC whose obligations are
guaranteed by either the Australia Borrower or the UK Borrower.




          “Eligible Receivables” shall mean, at any date at which the amount thereof is to be
determined, an amount equal to the sum of the present values (discounted on a quarterly basis, in
the case of amounts which are not due and payable within 12 months following the date of
determination by a rate of interest equal to the interest rate in effect on the date of the
computation with regard to Alternate Base Rate Loans) of (a) all net amounts which pursuant to a
binding agreement are contractually obligated to be paid to any Credit Party either unconditionally
or subject only to normal delivery requirements, and which are reasonably expected by the Borrowers
to be payable and collected from Acceptable Obligors minus (b) the sum, without double-counting, of
(i) the following items (based on the relevant Credit Party’s then best estimates): royalties,
residuals, commissions, participations and other payments to third parties, collection/distribution
expenses and commissions, home video fulfillment costs, taxes (including foreign withholding,
remittance and similar taxes) chargeable in respect of such accounts receivable, and any other
projected expenses of a Credit Party arising in connection with such amounts and (ii) the
outstanding amount of unrecouped advances made by a distributor to the extent subject to repayment
by a Credit Party or adjustment or recoupment, but an Eligible Receivable shall not include
amounts:




     (a) in the aggregate due from a single Acceptable Obligor which are in excess of the Allowable
Amount with respect to such Acceptable Obligor or, in the case of an Affiliated Group, in the
aggregate due from the relevant Acceptable Obligors with respect to that Affiliated Group, unless
in either case such excess is supported by an Acceptable L/C;



     (b) which in the sole judgment of the Administrative Agent, are subject to material conditions
precedent to payment (including a material performance obligation or a material executory aspect on
the part of a Credit Party or any other party or obligations contingent upon future events not
within the relevant Credit Party’s direct control); provided, however, that otherwise Eligible
Receivables which are attributable to items of Product acquired from a third party shall not be
excluded pursuant to this clause (b) if the entire acquisition price or minimum advance shall have
been paid to the extent then due and there is no material



- 19 -









 







condition or event (other than payment of the remaining purchase price) the occurrence of
which would likely result in any Credit Party losing its rights in such item of Product;



     (c) which are more than 120 days past due, in the case of receivables (other than theatrical
receivables);



     (d) which are theatrical receivables due from any obligor in connection with the theatrical
exhibition, distribution or exploitation of an item of Product that are still outstanding six
months after their booking;



     (e) to be paid in a currency other than United States Dollars, Canadian Dollars, Australian
Dollars or Sterling to the extent exceeding the U.S. Dollar Equivalent of U.S.$10,000,000, in the
aggregate, unless hedged in a manner satisfactory to the Administrative Agent;



     (f) to the extent included in the Credit Parties’ estimated bad debts;



     (g) due from any obligor which has 40% or more of the total receivable amount from such
obligor (x) 120 or more days past due, in the case of all receivables other than theatrical
receivables or (y) six months past the date of booking, for theatrical receivables (in each case
exclusive of amounts that are being disputed or contested in good faith);



     (h) for which there is bona fide request for a material credit, adjustment, compromise,
offset, counterclaim or dispute; provided, however, that only the amount in
question shall be excluded from such receivable;



     (i) which arise from a multi-picture Distribution Agreement which allows the obligor on such
receivable to exercise a right of offset or recoupment for any amount payable to or advanced by
such obligor under such Distribution Agreement, against any amount payable with respect to such
receivable; provided, however, that only the maximum amount which such obligor may
offset or recoup shall be excluded from Eligible Receivables



     (j) which are attributable to an item of Product or right in which a Credit Party cannot
warrant sufficient title to the underlying rights to justify such receivable;



     (k) in which the Administrative Agent (for the benefit of itself, the Issuing Bank and the
Group Lenders) does not have a first priority perfected security interest (except for amounts
attributable to items of Product for which a guild has a first priority security interest pursuant
to an intercreditor agreement entered into between such guild and the Administrative Agent in
accordance with Section 6.2(e) hereof);



     (l) which are determined by the Administrative Agent in its reasonable discretion, acting in
good faith, upon written notice from the Administrative Agent to LGEI and effective 10 days
subsequent to LGEI’s receipt of such notice, to be unacceptable;



     (m) which relate to an item of Product or right as to which the Administrative Agent has not
received a fully executed laboratory access letter or pledgeholder



- 20 -









 







agreement for a laboratory holding physical elements sufficient to fully exploit the rights
held by the Credit Party in such item of Product;



     (n) which may be subject to repayment to the extent not earned by performance (other than
performance consisting of delivery), but only to the extent of the maximum potential reduction or
repayment;



     (o) which are attributable to an item of Product which has not been Completed unless the
relevant Credit Party is in compliance with all credit agreement covenants applicable to the
production of such item of Product, including without limitation, delivery of any required
completion guaranty;



     (p) which are attributable to any item of Product which has not been Completed and for which a
completion guaranty is required by the credit agreement, to the extent there is not in effect a
completion guaranty from an Approved Completion Guarantor or to the extent that such receivable
amounts exceed the amount which would be paid to the relevant Credit Party under the related
completion guaranty if the item of Product were abandoned as of the date of computation of the
Borrowing Base (except that if a Letter of Credit is issued hereunder in order to support the
Credit Party’s minimum payment obligation to acquire distribution rights in an item of Product,
amounts attributable to such rights may be treated as Eligible Receivables (even though the item of
Product has not yet been Completed) but only if (A) proof of Completion of the item of Product must
be presented in order to draw under the Letter of Credit, (B) the portion of the Borrowing Base
attributable to such Eligible Receivables for such item of Product does not exceed the amount of
such Letter of Credit for such item of Product, and (C) such amounts otherwise meet all of the
applicable criteria for inclusion as Eligible Receivables); or



     (q) which will not become due and payable until one year or more after the Maturity Date.



          “Environmental Laws” shall mean any and all federal, state, provincial, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of
any Governmental Authority regulating, relating to, or imposing liability or standards of conduct
concerning, any Hazardous Material or environmental protection or health and safety, as now or at
any time hereafter in effect, including without limitation, the Clean Water Act also known as the
Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C. § 1251 et seq.,
the Clean Air Act (“CAA”), 42 U.S.C. §§ 7401 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act (“FIFRA”), 7 U.S.C. §§ 136 et
seq., the Surface Mining Control and Reclamation Act (“SMCRA”), 30 U.S.C. §§ 1201
et seq., the Comprehensive Environmental Response, Compensation and Liability Act
(“CERCLA”), 42 U.S.C. § 9601 et seq., the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), Public Law 99-499, 100 Stat. 1613, the Emergency
Planning and Community Right to Know Act (“EPCRA”), 42 U.S.C. § 11001 et
seq., the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901
et seq., the Occupational Safety and Health Act as amended (“OSHA”), 29
U.S.C. § 655 and § 657, the Waste Management Act, R.S.B.C. 1996, c. 481, the Transportation of
Dangerous Goods Act, R.S.B.C. 1996, c. 458 and other such laws relating to the storage,
transportation, treatment and disposal of Hazardous Substances into the air, surface water, ground
water, land surface,




- 21 -









 







subsurface strata or any building or structure and, together, in each case, with any amendment
thereto, and the regulations adopted pursuant thereto.




          “Equity Interests” means shares of the capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a trust or other
equity interests in any Person or any warrants, options or other rights to acquire such interests.




          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as heretofore
and hereafter amended, as codified at 29 U.S.C. § 1001 et seq. and the regulations
promulgated thereunder.




          “ERISA Affiliate” shall mean each Person (as defined in Section 3(9) of ERISA) which
is treated as a single employer with any Credit Party under Section 414(b), (c), (m) or (o) of the
Code.




          “Eurodollar Loan” shall mean a U.S. Eurodollar Loan, a Sterling Eurodollar Loan and/or
an Australian Dollar Eurodollar Loan, as the context may require.




          “Event of Default” shall have the meaning given to such term in Article 7 hereof and
for the purposes of Articles 8, 10, 11 and 12, hereof, the term “Event of Default” shall also
include a PA Event of Default.




          “Excluded Assets” shall mean (i) the Fractional Aircraft Interest, (ii) interests in
the [REDACTED], (iii) any Excluded Beneficial Interests and (iv) rights of any Credit Party under
any agreement to the extent that pursuant to the terms of such agreement, the granting of a
security interest in such rights would result in a termination or right of termination of, or is
otherwise prohibited under, such agreement by the other party thereto, but only to the extent such
prohibition on assignment is enforceable; provided, however, that immediately upon
the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and
such Credit Party shall be deemed to have granted a security interest in, all such rights and
interests as if such provision had never been in effect; provided, further that the
Credit Parties hereby covenant to use their commercially reasonable efforts consistent with
industry practice not to enter into any agreement that would exclude such rights from the
Collateral in the future.




          “Excluded Beneficial Interests” means any Equity Interests owned by the Credit Parties
to the extent that, and for so long as, a pledge of such Equity Interests would violate applicable
law or an enforceable contractual obligation binding on or relating to such Equity Interests.




          “Existing Credit Agreement” shall have the meaning given such term in the Introductory
Statement hereof.




          “FASB” shall mean the Financial Accounting Standards Board or any successor body.




          “Fee Letter” shall mean that certain letter agreement dated as of April 24, 2008
between LGEI on the one hand, and the Administrative Agent and JPMorgan Securities Inc. on the
other hand, relating to the payment of certain fees by the Borrowers.




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          “Film Library” shall mean with respect to each Credit Party, that portion of the
Collateral representing all of such Credit Party’s right, title and interest in and to all items of
Product including the distribution rights for each item of Product, commencing on the date that is
eighteen (18) months after the date that any such item of Product was first commercially
distributed, exhibited or released, and any proceeds thereof.




          “Film Spending Ratio” shall have the meaning given to such term in Section 6.21
hereof.




          “Fixed Charges Coverage Ratio” shall have the meaning given to such term in Section
6.20 hereof.




          “Foreign Rights Credit” shall mean with respect to each item of Product that is
intended for theatrical release and for which a Credit Party holds foreign distribution rights, an
amount equal to 15% of the Budgeted Negative Cost for such item of Product, or such lesser amount
as such Credit Party reasonably projects will be received by it on a net present value basis from
foreign distribution of such item of Product (computed in a manner acceptable to Administrative
Agent); reduced in either case dollar-for-dollar by the amount of any advance or other payment
paid, or committed to be paid (including, without limitation, any Eligible Receivables) to any
Credit Party with respect to the exhibition or other exploitation of such item of product in any
media outside the United States and Canada; provided, however, that no Foreign
Rights Credit will be included in the Borrowing Base (A) with respect to any item of Product prior
to its Completion except for items of Product (i) funded under the Special Production Tranche or
(ii) for which a Letter of Credit is issued in order to support the Borrowers’ minimum payment
obligation to acquire distribution rights in such item of Product or (B) for any item of Product
which was theatrically released in the United States more than 12 months prior to the date of
determination.




          “Fractional Aircraft Interest” shall mean a fractional interest in an executive jet
aircraft and/or a single purpose trust formed solely to hold such interest with an acquisition cost
for such aircraft or such trust which may not exceed U.S.$10,000,000.




          “Free Television Credit” shall mean with respect to each item of Product intended for
theatrical release in the United States and for which a Credit Party holds free television rights
for such territory, an amount equal to (A) until 60 days after theatrical release of such item of
Product, 5% of the Budgeted Negative Cost of such item of Product reduced by any amounts paid or
advanced to any Credit Party with respect to such item of Product in such media, and (B)
thereafter, 80% of the aggregate Remaining Ultimates with respect to the free television rights for
such item of Product in the United States and Canada; provided however that no Free Television
Credit will be included in the Borrowing Base with respect to any item of Product prior to its
Completion except for items of Product (i) which are funded under the Special Production Tranche or
(ii) for which a Letter of Credit is issued in order to support the Borrowers’ minimum payment
obligation to acquire distribution rights in such item of Product.




          “Fundamental Documents” shall mean this Credit Agreement, the Notes, the Pledgeholder
Agreements, the Laboratory Access Letters, the Copyright Security Agreement, the Copyright Security
Agreement Supplements, the Trademark Security Agreement, the Trademark




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Security Agreement Supplements, the Notices of Assignment and Irrevocable Instruction, the
Contribution Agreement, any Instrument of Assumption and Joinder, the Hypothec and debenture,
Pledge of Debenture and mandate delivered in connection therewith, Deed of Debenture, UCC financing
statements, the PPSA financing statements, each Special Purpose Producer Credit Agreement and each
of the agreements delivered pursuant thereto and any other ancillary documentation which is
required to be or is otherwise executed by any Credit Party and delivered to the Administrative
Agent in connection with this Credit Agreement or any of the documents listed above.




          “GAAP” shall mean generally accepted accounting principles in the United States of
America from time to time consistently applied (except for accounting changes in response to FASB
releases, or other authoritative pronouncements).




          “Governmental Authority” shall mean any federal, state, provincial, municipal or other
governmental department, commission, board, bureau, agency or instrumentality, or any court, in
each case whether of the United States, Canada or any foreign jurisdiction.




          “Group Lender” and “Group Lenders” shall mean, at any time for which it is to
be determined, the UK Lender, Australia Lender and/or the LGEI Lenders, as applicable.




          “Guarantors” shall mean (i) LGEC with respect to the obligations of the Credit
Parties, (ii) LGEI with respect to the obligations of each of the other Borrowers, (iii) each
Subsidiary of LGEC which is a signatory of this Agreement and any other direct or indirect
Subsidiary of LGEC acquired or created after the date hereof (other than (a) Unrestricted
Subsidiaries, (b) Inactive Subsidiaries and (c) with respect to the guaranty of PA Obligations, any
PA Borrower), which Subsidiary becomes a signatory to this Credit Agreement as a Guarantor as
required by Section 5.17 with respect to (1) the obligations of all of the Borrowers under this
Credit Agreement and (2) the PA Obligations; provided, however, that a Controlled
Foreign Subsidiary incorporated in any given jurisdiction shall only guarantee the obligations of
other Controlled Foreign Subsidiaries also incorporated in such jurisdiction. Each of the
Guarantors as of the date hereof shall be listed on Schedule 1.3 hereto.




          “Guaranty” shall mean, as to any Person, any direct or indirect obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, Capital Lease, dividend or other
monetary obligation (“primary obligation”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, by contract, as a general partner or otherwise, including,
without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, or (c) to purchase property, securities or services, in
each case, primarily for the purpose of assuring the performance by the primary obligor of any such
primary obligation. The amount of any Guaranty shall be deemed to be an amount equal to (x) the
stated or determinable amount of the primary obligation in respect of which such Guaranty is made
(or, if the amount of such primary obligation is not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to perform thereunder))
or (y) the stated maximum liability under such Guaranty, whichever is less.




- 24 -









 








          “Hazardous Materials” shall mean any flammable materials, explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or similar
materials defined in any Environmental Law.




     
     “[REDACTED]” shall mean [REDACTED], a California limited liability company whose only members
shall be LGEI, or one of its subsidiaries, [REDACTED] a California limited liability company (the
"[REDACTED]”), or one of the [REDACTED] subsidiaries, and any other members added with the consent
of LGEI and [REDACTED], which shall be formed for the sole purpose [REDACTED].




          “Home Video Credit” shall mean with respect to each item of Product that is intended
for domestic theatrical release and for which the Borrowers hold domestic home video rights, an
amount equal to (A) until 60 days after theatrical release of such item of Product, 25% of the
Budgeted Negative Cost of such item of Product reduced by any amounts paid or advanced to any
Credit Party with respect to such item of Product in such media, and (B) thereafter, 80% of the
aggregate Remaining Ultimates with respect to the home video rights for such item of Product in the
United States and Canada; provided however that no Home Video Credit will be included in the
Borrowing Base with respect to any item of Product prior to its Completion except for items of
Product which are (i) funded under the Special Production Tranche or (ii) for which a Letter of
Credit is issued in order to support the Borrowers’ minimum payment obligation to acquire
distribution rights in such item of Product.




          “Hypothec” shall mean a hypothec substantially in the form of Exhibit M-1 or such
other form as may be acceptable to the Administrative Agent.




          “Inactive Subsidiary” shall mean (i) as of the Closing Date, each direct or indirect
Subsidiary of LGEC listed on Schedule 3.7(c) hereto, and (ii) any additional direct or indirect
Subsidiary of LGEC hereafter acquired or formed by LGEC or any of its Subsidiaries which in either
case has assets of less than U.S.$50,000; provided, however, that an Inactive
Subsidiary shall cease to be an Inactive Subsidiary hereunder at such time, if any, that such
former Inactive Subsidiary acquires assets valued at more than U.S.$50,000.




          “Incremental Facility” shall have the meaning given to such term in Section 2.23 (a)
hereof.




          “Indebtedness” shall mean (without double counting), at any time and with respect to
any Person, (i) indebtedness of such Person for borrowed money (whether by loan or the issuance and
sale of debt securities) or for the deferred purchase price of property or services purchased
(other than amounts constituting trade payables (payable within 90 days) arising in the ordinary
course of business); (ii) obligations of such Person in respect of letters of credit, acceptance
facilities, or drafts or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person; (iii) obligations of such Person under Capital Leases;
(iv) deferred payment obligations of such Person resulting from the adjudication or settlement of
any litigation; and (v) (without duplication) indebtedness of others of the type described in
clauses (i), (ii), (iii) and (iv) hereof which such Person has (a) directly or indirectly assumed
or guaranteed in connection with a Guaranty or (b) secured by a Lien on the assets of such Person,
whether or not such Person has assumed such indebtedness (provided, that if such




- 25 -









 







Person has not assumed such indebtedness of another Person then the amount of indebtedness of
such Person pursuant to this clause (v) for purposes of this Credit Agreement shall be equal to the
lesser of the amount of the indebtedness of the other Person or the fair market value of the assets
of such Person which secures such other indebtedness).




          “Initial Date” shall mean (i) in the case of the Administrative Agent and the Issuing
Bank, the date hereof, (ii) in the case of each Lender which is an original party to this Credit
Agreement, the date hereof and (iii) in the case of any other Lender, the effective date of the
Assignment and Acceptance pursuant to which it became a Lender.




          “Instrument of Assumption and Joinder” shall mean an Instrument of Assumption and
Joinder substantially in the form of Exhibit L hereto.




          “Interest Deficit” shall have the meaning given to such term in Section 2.18 hereof.




          “Interest Payment Date” shall mean (i) as to any Eurodollar Loan having an Interest
Period of one, two or three months, the last day of such Interest Period, (iii) as to any
Eurodollar Loan having an Interest Period of more than three months, the last day of such Interest
Period and, in addition, each date during such Interest Period that would be the last day of an
Interest Period commencing on the same day as the first day of such Interest Period but having a
duration of three months or an integral multiple thereof and (iii) with respect to Alternate Base
Rate Loans, the last Business Day of each March, June, September and December (commencing the last
Business Day of September, 2008).




          “Interest Period” shall mean as to any Eurodollar Loan, the period commencing on the
date such Loan is made, continued or converted or the last day of the preceding Interest Period and
ending on the numerically corresponding day (or if there is no corresponding day, the last day) in
the calendar month that is one, two, three, six, nine or twelve months thereafter as the Borrowers
may elect; provided, however, that (i) if any Interest Period would end on a day
which shall not be a Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such next succeeding Business Day would fall in the next calendar month, in
which case, such Interest Period shall end on the next preceding Business Day, (ii) no Interest
Period may be selected which would end later than the Maturity Date, (iii) interest shall accrue
from and including the first day of such Interest Period to but excluding the last date of such
Interest Period and (iv) no Interest Period of nine or twelve months may be selected unless such
Interest Period is generally available in the market (as determined by the Administrative Agent at
the time of each request) and is consented to by all the Group Lenders.




          “Interest Rate Protection Agreement” shall mean any interest rate swap agreement,
interest rate cap agreement, synthetic cap, collar or floor or other financial agreement or
arrangement designed to protect a Credit Party against fluctuations in interest rates.




          “Interest Rate Type” shall have the meaning given to such term in Section 2.1(e)
hereof.




          “Investment” shall mean any stock, evidence of indebtedness or other security of any
Person, any loan, advance, contribution of capital, extension of credit or commitment




- 26 -









 







therefor (including, without limitation, the Guaranty of loans made to others, but excluding
current trade and customer accounts receivable arising in the ordinary course of business and
payable in accordance with customary trading terms in the ordinary course of business), any
purchase of (i) any security of another Person or (ii) any business or undertaking of any Person or
any commitment to make any such purchase, or any other investment; provided, however, that an
Acquisition shall not be considered an “Investment.”




          “Issuing Bank” shall mean JPMorgan Chase Bank, N.A., a national banking association in
its capacity as such.




          “ITA” shall mean the Income Tax Act (Canada) R.S.C. 1985 (5th supp.) c.1, and the
regulations enacted thereunder, as amended.




          “J.P. Morgan Europe Limited” shall mean J.P. Morgan Europe Limited, 125 London Wall,
London, EC2Y 5AJ, England; Attn: Loan and Agency — 9th Floor; Fax Number: 44 207 777 2360;
Telephone Number: 44 207 777 2352/2355.




          “Laboratory” shall mean any laboratory acceptable to the Administrative Agent which is
located in the United States, the United Kingdom, Australia or Canada or any other jurisdiction
which may be acceptable to the Administrative Agent in its discretion and is a party to a
Pledgeholder Agreement or a Laboratory Access Letter.




          “Laboratory Access Letter” shall mean a letter agreement among (i) a Laboratory
holding any elements of any item of Product to which any Credit Party has the right of access, (ii)
such Credit Party and (iii) the Administrative Agent, substantially in the form of Exhibit D hereto
or a form otherwise acceptable to the Administrative Agent.




          “L/C Exposure” shall mean, at any time for which it is to be determined, the amount
expressed in U.S. Dollars or the U.S. Dollar Equivalent of the aggregate face amount of all drafts
which may then or thereafter be presented by beneficiaries under all Letters of Credit issued to
LGEI then outstanding plus (without duplication), the face amount of all drafts which have
been presented or accepted under all Letters of Credit issued to LGEI but have not yet been paid or
have been paid but not reimbursed, whether directly or from the proceeds of a U.S. Dollar Loan
hereunder.




          “Lender” and “Lenders” shall mean the UK Lender, Australia Lender, the LGEI
Lenders and/or the PA Lender, as applicable.




          “Lending Office” shall mean, with respect to any of the Group Lenders, the branch or
branches (or affiliate or affiliates) from which such Group Lender’s Eurodollar Loans or Alternate
Base Rate Loans, as the case may be, are made or maintained and for the account of which all
payments of principal of, and interest on, such Group Lender’s Eurodollar Loans or Alternate Base
Rate Loans are made, as notified to the Administrative Agent from time to time.




          “Letter of Credit” shall mean a letter of credit issued by the Issuing Bank pursuant
to Section 2.6 hereof.




          “LGEC” means Lions Gate Entertainment Corp.




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          “LGEI Commitment” shall mean the Commitment of each LGEI Lender to make U.S. Dollar
Loans to LGEI (in accordance with Section 2.1), to participate in Letters of Credit (in accordance
with Section 2.6) and to purchase Sterling Loans from the UK Lender and Australian Dollar Loans
from the Australia Lender (in accordance with Sections 2.21(f) and 2.22(f), respectively) up to an
aggregate amount at any one time outstanding not in excess of the amount set forth (i) opposite its
name in the Schedule of Commitments appearing in Schedule 1.1. hereto or (ii) in any applicable
Assignment and Acceptance(s) to which it may be a party, as the case may be, as such amount may be
reduced from time to time in accordance with the terms of this Credit Agreement.




          “LGEI Facility” shall mean a revolving credit facility providing for the issuance of
U.S. Dollar Loans to and Letters of Credit for the account of LGEI in an aggregate principal amount
not to exceed U.S.$340,000,000.




          “LGEI Lender” shall mean (i) the financial institutions whose names appear on the
signature pages hereto and who are designated as such on Schedule 1.1 hereof, (ii) any financial
institution that becomes a Lender under Section 2.23 hereof and (iii) any assignee of a LGEI Lender
pursuant to Section 13.3 hereof.




          “LGF” means Lions Gate Films Inc. and its successors.




          “LGFF Slate Transaction” shall mean the transactions involving the entity LG Film
Finance I, LLC or any successor thereof (“FilmCo”), pursuant to which, among other things,
(i) LGEI and Pride Pictures LLC (“FundCo”) acquired membership interests in FilmCo pursuant
to that certain Limited Liability Company Agreement for LG Film Finance I, LLC dated as of May 25,
2007, (ii) FilmCo acquired (or will acquire) from LGF ownership of items of Product pursuant to
that certain Master Covered Picture Purchase Agreement dated as of May 25, 2007, and (iii) FilmCo,
HSBC (as collateral agent for certain FundCo noteholders) and Administrative Agent entered into
that certain Intercreditor and Subordination Agreement dated as of May 25, 2007.




          “LGPA” shall have the meaning given such term in the Introductory Statement hereof.




          “LIBO Rate” shall mean, with respect to the Interest Period for a Eurodollar Loan, a
rate per annum equal to the quotient of (A) (i) the British Bankers’ Association (the
“BBA”) Interest Settlement Rate per annum at which deposits in U.S. dollars are offered in
London, England to prime banks in the London interbank market for such Interest Period as displayed
on the Reuters LIBOR01 Page as of 11:00 a.m. (London time) two (2) Business Days before the first
day of such Interest Period in an amount substantially equal to such Eurodollar Loan comprising
part of such Borrowing to be outstanding during such Interest Period or (ii) if the rate described
in clause (A)(i) does not appear on Reuters Screen page LIBOR01 on any relevant date of
determination, the average of the rates at which Dollar deposits approximately equal in principal
amount to such Eurodollar Loan and for a maturity equal to the applicable Interest Period are
offered to the Lending Office of the Administrative Agent in immediately available funds in the
London Interbank Market for Eurodollars at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period, in each




- 28 -









 







case divided by (B) one (1) minus the applicable statutory reserve requirements of the
Administrative Agent, expressed as a decimal (including without duplication or limitation, basic,
supplemental, marginal and emergency reserves), from time to time in effect under Regulation D or
similar regulations of the Board. Reuters LIBOR01 Page means the display designated as page
LIBOR01 on the Reuters 3000 Xtra (or such other page as may replace page LIBOR01 on that service or
such other service as may be nominated by the BBA as the information vendor for the purpose of
displaying BBA Interest Settlement Rates for U.S. dollars). It is agreed that for purposes of this
definition, Eurodollar Loans made hereunder shall be deemed to constitute Eurocurrency Liabilities
as defined in Regulation D and to be subject to the reserve requirements of Regulation D.




          “Library Revenue” shall mean all revenue earned by a Credit Party after the first
exploitation cycle of a Completed item of Product which shall include revenue attributable to
theatrical exploitation, the first six months of video sales, the first pay-television contract and
minimum guarantees from the first international sales.




          “Lien” shall mean any mortgage, copyright mortgage, pledge, security interest,
hypothec, encumbrance, lien or charge or any other claim of any kind whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any agreement to grant a
security interest at a future date, any lease in the nature of security, and the filing of, or
agreement to give, any financing statement under the Uniform Commercial Code of any jurisdiction).




          “Liquidity Ratio” shall have the meaning given such term in Section 6.19 hereof.




          “Loan” or “Loans” shall mean the Sterling Loans, Australian Dollar Loans
and/or the U.S. Dollar Loans, as applicable.




          “Mandatory Cost” means the percentage rate per annum calculated by the Administrative
Agent in accordance with Schedule 1.4.




          “Margin Stock” shall be as defined in Regulation U of the Board.




          “Material Adverse Effect” shall mean any change or effect that (a) has a materially
adverse effect on the business, assets, properties, operations or financial condition of the Credit
Parties taken as a whole, (b) materially impairs the legal right, power or authority of any Credit
Party to perform its respective obligations under the Fundamental Documents to which it is a party
or (c) materially impairs the validity or enforceability of, or materially impairs the rights,
remedies or benefits available to the Lenders under, the Fundamental Documents; provided,
however, that any event or condition will be deemed to have a “Material Adverse Effect” if
such event or condition when taken together with all other events and conditions occurring or in
existence at such time (including all other events and conditions which, but for the fact that a
representation, warranty or covenant is subject to a “Material Adverse Effect” exception, would
cause such representation or warranty contained herein to be untrue or such covenant to be
breached) would result in a “Material Adverse Effect”, even though, individually, such event or
condition would not do so.




          “Maturity Date” shall mean July 25, 2013.




- 29 -









 








          “MQP” means MQP, LLC and its successors.




          “Multiemployer Plan” shall mean a plan described in Section 4001(a)(3) of ERISA to
which any Credit Party or ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the five preceding plan years made or accrued an obligation to
make contributions.




          “Negative Pick-up Obligation” means, with respect to any item of Product produced by a
third party, a commitment to pay a certain sum of money or other Investment made by the Credit
Party in order to obtain ownership or distribution rights in such item of Product, but which does
not require any payment unless or until the requirements of clause (A) of the definition of
Completion have been satisfied. Negative Pick-up Obligation includes both “traditional” negative
pickup arrangements and indirect structures.




          “Net Cash Proceeds” shall mean cash proceeds received by a Credit Party as a result of
the issuance of any Equity Interests or incurrence of any Indebtedness permitted hereunder in each
case net of all legal, title and recording tax expenses, commissions, discounts, investment banking
fees and other fees and expenses actually paid to Persons other than Affiliates in connection with
such issuance or incurrence.




          “Note” or “Notes” shall have the meaning given to such term in Section 2.5
hereof.




          “Notice of Assignment and Irrevocable Instructions” shall mean the Notice of
Assignment and Irrevocable Instructions substantially in the form of Exhibit K hereto or in such
other form as shall be acceptable to the Administrative Agent, including, without limitation, the
inclusion of such notice and instructions in a Distribution Agreement.




          “Obligations” shall mean (a) the obligation of the Borrowers to make due and punctual
payment of (i) principal of and interest on the Loans, the face amount of the Commitment Fees, any
reimbursement obligations in respect of Letters of Credit, monetary obligations of any Credit Party
pursuant to interparty agreements delivered in connection with any Special Purpose Producer Credit
Agreement, costs and attorneys’ fees and all other monetary obligations of the Borrowers to the
Administrative Agent, the Issuing Bank or any Group Lender under this Credit Agreement, the Notes,
any other Fundamental Document or the Fee Letter, (ii) all amounts payable by the Borrowers to any
Group Lender under any Currency Agreement or Interest Rate Protection Agreement, provided that such
Group Lender will use commercially reasonable efforts to provide notice thereof to the
Administrative Agent within ten (10) Business Days after execution of such Currency Agreement or
Interest Rate Protection Agreement (it being understood and agreed that the failure to provide such
notice within ten (10) Business Days of the execution of such agreements will not result in the
exclusion of the amounts payable pursuant to such agreements from the term ‘Obligations’) and (iii)
amounts payable to JPMorgan Chase Bank, N.A. or any of its Affiliates in connection with any bank
account maintained by the Borrowers or any other Credit Party at JPMorgan Chase Bank, N.A. or any
such Affiliate or any other banking services provided to the Borrowers or any other Credit Party by
JPMorgan Chase Bank, N.A. or any such Affiliate and (b) for the purposes of Articles 8, 9 and 12,
hereof and Annex I, the term “Obligations” shall also include the PA Obligations.





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          “Off-Balance Sheet Commitments” shall mean all binding, irrevocable commitments of the
Credit Parties for the acquisition of items of Product, including cash flow commitments, Program
Acquisition Guarantees, Negative Pick-up Obligations and print and advertising commitments which
are not, pursuant to GAAP, reflected on the consolidated balance sheet of LGEC; provided, however,
that such obligations for print and advertising commitments shall not be included in Off-Balance
Sheet Commitments until principal photography has commenced for the item of Product to which such
commitment relates.




          “Other Domestic Receivables” shall mean those receivables or other rights to receive
payments that meet all of the requirements of an “Eligible Receivable” other than that the obligor
is not an Acceptable Obligor; provided that such obligor has both its principal place of
business and jurisdiction of incorporation or formation located within the United States or Canada.




          “Other Foreign Receivables” shall mean those receivables or other rights to receive
payments that meet all of the requirements of an “Eligible Receivable” other than that the obligor
is not an Acceptable Obligor; provided that such obligor has either its principal place of
business or jurisdiction of incorporation or formation located outside the United States or Canada.




          “PA Borrower” shall mean, jointly and severally, LGPA together with its Subsidiaries
party to the PA Credit Agreement from time to time.




          “PA Credit Agreement” shall mean that certain loan agreement entered into on April 10,
2008, by and between PA Lender and PA Borrowers.




          “PA Event of Default” shall mean an Event of Default, as defined in the PA Credit
Agreement.




          “PA Lender” shall mean Pennsylvania Regional Center, LP I and its permitted successors
and assigns, as lender to PA Borrowers pursuant to the terms of the PA Credit Agreement.




          “PA Loan” shall mean the loans made under, and in accordance with, the PA Credit
Agreement.




          “PA Obligations” shall mean all “Obligations” owing by the PA Borrowers to PA Lender
as defined in the PA Credit Agreement.




          “Pay Television Credit” shall mean, with respect to each item of Product that is
intended for domestic theatrical release and for which the Borrowers hold domestic pay television
rights, an amount equal to (A) until 60 days after theatrical release of such item of Product, 5%
of the Budgeted Negative Cost of such item of Product reduced by any amounts paid or advanced to
any Credit Party with respect to such item of Product in such media, and (B) thereafter, 80% of the
aggregate Remaining Ultimates with respect to the pay television rights for such item of Product in
the United States and Canada; provided however that no Pay Television Credit will be included in
the Borrowing Base with respect to any item of Product prior to its Completion except for items of
Product which are (i) funded under the Special




- 31 -









 







Production Tranche or (ii) for which a Letter of Credit is issued in order to support the
Borrowers’ minimum payment obligation to acquire distribution rights in such item of Product.




          “PBGC” shall mean the Pension Benefit Guaranty Corporation or any successor thereto.




          “Pennsylvania Regional Financing Arrangement” shall mean the financing arrangement
between LGPA, as borrower, and Pennsylvania Regional, as lender, on substantially the terms set
forth in the PA Credit Agreement.




          “Percentage” shall mean with respect to any Group Lender, the percentage of the Total
LGEI Commitment, represented by such Group Lender’s LGEI Commitment; provided however, that solely
for purposes of Section 12.6 hereof (including determination of Pro Rata Share for use in
connection with Section 12.6), Percentage shall be determined as if the PA Lender holds a LGEI
Commitment equal to its commitment under the PA Credit Agreement and the Total LGEI Commitment were
increased by such amount.




          “Permitted Encumbrances” shall mean Liens permitted under Section 6.2 hereof.




          “Permitted Preferred Stock” shall mean any shares of preferred stock issued by LGEC
that does not require any cash payments (other than for regularly scheduled dividends) at any time
prior to one year after the Maturity Date, whether for non-regularly scheduled dividends,
mandatory redemption, change of control, put at the option of the holder or otherwise;
provided that prior to the issuance of any such preferred stock, the Borrowers
shall have delivered to the Administrative Agent a certificate of an Authorized Officer, in form
and substance satisfactory to the Administrative Agent, demonstrating pro forma compliance with the
covenants set forth in Section 6.15 through 6.21 hereof after giving effect to the issuance of such
preferred stock.




          “Permitted Slate Financing” shall mean a debt financing transaction which LGEI and/or
the Credit Parties may at their option consummate and which satisfies all of the following
criteria: (i) the borrower or issuer in such transaction (“SlateCo”) will be a new corporation or
limited liability company formed solely for the purpose of the Permitted Slate Financing; (ii)
SlateCo will not engage in any business other than producing or acquiring Product to be distributed
by LGEI or one or more other Credit Parties; (iii) SlateCo will be a direct or indirect
wholly-owned subsidiary of LGEI and will become a Guarantor of the Facility, provided however that
the obligations of SlateCo as a Guarantor of the Facility and the related security interests in
favor of the Agent shall be subordinated to the rights, claims and security interests of the
providers of the Permitted Slate Financing and subject to an intercreditor agreement to be
negotiated in good faith by the Administrative Agent taking into consideration the rights in the
collateral agreed to be pledged under the Permitted Slate Financing; (iv) the Investment by LGEI
and/or the other Credit Parties in SlateCo and the Permitted Slate Financing shall be limited to
the use of up to $150,000,000 face amount of receivables due or to become due from [REDACTED] or a
replacement of any such party, which may be made in the form of a capital contribution to SlateCo
or the grant of a security interest in such receivables to the lenders to SlateCo or otherwise; (v)
all indebtedness incurred by SlateCo will be expressly non-recourse to any other Credit Party
except (A) for the assignment of SlateCo’s rights under the distribution




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agreement(s) to be entered into with one or more other Credit Parties, (B) unsecured
guarantees provided that there is a corresponding deduction to the Borrowing Base in an amount
equal to the principal amount of such guarantees, or (C) as otherwise approved by the
Administrative Agent; and (vi) all other terms and conditions shall be satisfactory to the
Administrative Agent.




          “Person” shall mean any natural person, corporation, division of a corporation,
limited liability company, partnership, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision thereof.




          “Physical Materials” shall have the meaning given to such term in paragraph (iv) of
the definition of “Collateral” herein.




          “Pledge of Debenture” shall mean a pledge of debenture substantially in the form of
Exhibit M-2 hereof or such other form as may be acceptable to the Administrative Agent.




          “Pledged Collateral” shall mean the Pledged Securities and any proceeds (as defined in
Section 9-306(1) of the UCC) of the Pledged Securities.




          “Pledged Securities” shall mean all of the issued and outstanding capital stock or
other equity interests of each of the Credit Parties (other than LGEC) and all other equity
securities or interests now owned or hereafter acquired by any of the Credit Parties, including
without limitation the securities listed in Schedule 3.7(a) hereto; provided,
however, that anything to the contrary herein notwithstanding, Pledged Securities shall not
include (i) the Equity Interests of Controlled Foreign Subsidiaries which are owned directly by
another Controlled Foreign Subsidiary, (ii) Equity Interests in excess of 65% of the Equity
Interests in any Controlled Foreign Subsidiary which are owned directly by a Credit Party which is
not a Controlled Foreign Subsidiary or (iii) any Excluded Beneficial Interests.




          “Pledgeholder Agreement” shall mean a laboratory pledgeholder agreement among a Credit
Party (or Credit Parties), the Administrative Agent, certain distributors (as applicable), the
Approved Completion Guarantor (if there is one), and one or more Laboratories, substantially in the
form of Exhibit E-1 or Exhibit E-2 hereto, or in such other form and with such additional parties
as shall be acceptable to the Administrative Agent.




          “Pledgors” shall mean those Credit Parties that own any of the Pledged Securities.




          “PPSA” shall mean unless otherwise provided in this Credit Agreement, the Personal
Property Security Act, R.S.O. 1990 c.P.10 as heretofore and hereafter amended and in effect in the
Province of Ontario, or, where the context requires, the legislation of the other provinces of
Canada relating to security in personal property generally, including accounts receivable, as
adopted by and in effect from time to time in such provinces or territories in Canada, as
applicable.




          “Pro Rata Share” shall mean with respect to any Obligation or other amount, each Group
Lender’s pro rata share of such Obligation or other amount determined in accordance with such Group
Lender’s Percentage.




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          “Product” shall mean any motion picture, film or video tape or other audio-visual work
or episode thereof produced for theatrical, non-theatrical or television release or for release in
any other medium, in each case whether recorded on film, videotape, cassette, cartridge, disc or on
or by any other means, method, process or device whether now known or hereafter developed, with
respect to which any Credit Party (i) is the copyright owner or (ii) acquires an equity interest or
distribution rights. The term “item of Product” shall include, without limitation, the scenario,
screenplay or script upon which such item of Product is based, all of the properties thereof,
tangible and intangible, and whether now in existence or hereafter to be made or produced, whether
or not in possession of the Credit Parties, and all rights therein and thereto, of every kind and
character.




          “Production Account(s)” shall mean individually or collectively, as the context so
requires, each demand deposit account(s) established by a Credit Party or Special Purpose Producer
at a commercial bank located in the United States or Canada or otherwise reasonably acceptable to
the Administrative Agent, for the sole purpose of paying the production costs of a particular item
of Product, and, where applicable, as to which the Approved Completion Guarantor for such item of
Product, has agreed in writing that amounts deposited in such account shall be deemed available for
production of such item of Product, for purposes of the Completion Guaranty for such item of
Product.




          “Production Exposure” for an Uncompleted item of Product shall mean (i) with respect
to any item of Product for which a Credit Party has direct production responsibility, the Budgeted
Negative Cost for such item of Product (net of amounts being cash-flowed as and when needed by a
third party unrelated to a Credit Party pursuant to contractual arrangements reasonably acceptable
to the Administrative Agent), and (ii) with respect to all other Product, the acquisition price
paid or to be paid by a Credit Party for such item of Product or any rights therein, including
without limitation, the amount of any related Program Acquisition Guarantee, Negative Pick-up
Obligations or co-financing obligation.




          “Program Acquisition Guarantees” shall mean any commitment of a Credit Party to a
producer or owner of Product in conjunction with the acquisition of Product or distribution rights
in Product by such Credit Party to the effect that (a) the gross revenues to be generated in the
future from the exploitation of such Product or the net revenues to be received by such producer or
owner from the exploitation of such Product will equal or exceed an amount specified in the
acquisition agreement related to such Product or (b) otherwise requires payment by the Credit Party
of a minimum amount specified in the acquisition agreement related to such Product regardless of
actual performance of such Product.




          “Quiet Enjoyment” shall have the meaning given such term in Section 8.13 hereof.




          “Regulation T”, “Regulation U” or “Regulation X” shall mean such
regulation of the Board as from time to time in effect and all official rulings and interpretations
thereunder or thereof.




          “Remaining Ultimates” shall mean with respect to any theatrical motion picture (on a
Product by Product basis), the first cycle amounts which are projected by the Borrowers to




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become payable to a Credit Party as determined by the Borrowers from time to time in
accordance with this paragraph and in a manner otherwise reasonably acceptable to the
Administrative Agent. The Remaining Ultimates shall be calculated initially on the date which is
60 days after the general theatrical release in the United States of any such item of Product and
thereafter on each date on which Borrowing Base Certificates are delivered from time to time. The
computation of the Remaining Ultimates will be (i) computed in a manner consistent with ultimates
prepared by the Borrowers for accounting purposes, (ii) based, to the extent available, upon any
supporting written material delivered to a Borrower under the relevant Distribution Agreement which
will indicate the remaining uncollected amounts payable to the Borrower, (iii) present valued at
the rate used by the Borrowers for accounting purposes, (iv) after deduction for all distribution
fees and other remaining amounts deductible or which may be offset by a distributor or licensee
from its obligation to make payments to the Borrower and any other remaining cost or expense
incurred by a Credit Party for the distribution or other exploitation of such item of Product, (v)
reduced by all Eligible Receivables and Other Domestic Receivables with respect to such Product,
territory and media which are otherwise included in the Borrowing Base, and (vi) shall not include
any amounts in which the Administrative Agent (for the benefit of itself, any Issuing Bank and the
Group Lenders) does not have a first priority perfected security interest under the Uniform
Commercial Code or other relevant personal property regime and applicable copyright law.




          “Replication Advances” shall mean advances incurred pursuant to dvd replication, tape
duplication or film processing transactions which require repayment if certain volume commitments
are not fulfilled provided that repayment of such advances (w) may not be accelerated or be
required to be paid on demand unless such repayment obligation is completely unsecured, (x) do not
require cash payments of interest, (y) are on terms at least as favorable as the Credit Parties’
current replication deals and (z) matures after the Maturity Date.




          “Reportable Event” shall mean any reportable event as defined in Section 4043(c) of
ERISA, other than a reportable event as to which provision for 30-day notice to the PBGC would be
waived under applicable regulations had the regulations in effect on the Closing Date been in
effect on the date of occurrence of such reportable event.




          “Required Lenders” shall mean Group Lenders holding at least 51% of the Total Credit
Exposure.




          “Restricted Payment” shall mean (i) any distribution, cash dividend or other direct or
indirect payment on account of shares of any Equity Interest in any Credit Party, (ii) any
redemption or other acquisition, re-acquisition or retirement by a Credit Party of any Equity
Interest in any Credit Party or an Affiliate, now or hereafter outstanding, (iii) any payment made
to retire, or obtain the surrender of, any outstanding warrants, puts or options or other rights to
purchase or otherwise acquire any Equity Interest in any Credit Party or an Affiliate, now or
hereafter outstanding, (iv) any payment by a Credit Party of principal of, premium, if any, or
interest on, or any redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Debt or any Replication Advance and (v) any payment under any
Synthetic Purchase Agreement.




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          “Services Company” shall mean a corporation (which may or may not be a subsidiary of
LGEI) having a permanent establishment in Quebec which provides production services pursuant to a
production services agreement between MQP and such Services Company.




          “SGF” shall mean SGF Entertainment Inc., a subsidiary of the Societe Generale
Financement du Quebec.




          “SGF Co-Financing Arrangement” shall mean the co-financing arrangement by and among
MQP, LGEC and SGF pursuant to which, among other things, (i) MQP agreed to sell revenue
participation interests in certain motion pictures and television productions to SGF pursuant to
that certain Revenue Participation Purchase Agreement among MQP, SGF, LGF and Lions Gate Television
Inc. (“LGT”) dated as of July 25, 2007, (ii) MQP licensed certain motion pictures to LGF pursuant
to that certain Master Distribution Agreement (Film Productions) between MQP and LGF, dated as of
July 25, 2007 and (iii) MQP agreed to license certain television productions to LGT pursuant to
that certain Master Distribution Agreement (Television Productions) between MQP and LGF, dated as
of July 25, 2007.




          “Sharing Event” shall mean that (i) an Event of Default shall have occurred and be
continuing and such Event of Default shall either be (x) an Event of Default specified in
paragraph (h) or (i) of Article 7 hereof or (y) any other Event of Default for which the
Administrative Agent has opted to, or has been directed by the Required Lenders to, declare the
principal of and interest on the Loans and Notes and all other amounts payable hereunder or
thereunder to be forthwith due and payable or (ii) the Borrowers have failed to pay all outstanding
Obligations at the Maturity Date.




          “Special Production Tranche” shall mean, with respect to each Designated Picture, a
portion of the Commitments equal to the sum of the Strike Price for such Designated Picture, plus
the amount of any enhancements committed to be funded by a Credit Party or Special Purpose Producer
for such Designated Picture, plus to the extent not already included in one of the foregoing items,
an interest reserve for the period through the projected date of Completion of such Designated
Picture.




          “Special Purpose Producer” shall mean a special purpose corporation or limited
liability company formed solely for the purpose of producing a particular theatrical motion
picture, television series or direct to home video Product which, in each case, will be purchased
or distributed by a Credit Party.




          “Special Purpose Producer Credit Agreement” shall mean a credit, security and pledge
agreement between a Special Purpose Producer and the Administrative Agent, substantially in the
form of Exhibit N hereto.




          “Sterling” and “£” shall mean lawful money of the United Kingdom of Great
Britain and Northern Ireland.




          “Sterling Clearing Account” shall mean such Sterling denominated account of the
Administrative Agent as may be designated by the Administrative Agent from time to time.




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          “Sterling Eurodollar Loan” shall mean a Sterling Loan based on the Sterling LIBO Rate
in accordance with the provisions of Article 2 hereof.




          “Sterling LIBO Rate” shall mean, with respect to the Interest Period for a Sterling
Eurodollar Loan, an interest rate per annum equal to the BBA Interest Settlement Rate per annum at
which deposits in Sterling are offered in London, England to prime banks in the London interbank
market for such Interest Period as displayed on Telerate Screen page 3750 as of 11:00 a.m. (London
time) on the first day of such Interest Period in an amount substantially equal to such Sterling
Eurodollar Loan comprising part of such Borrowing to be outstanding during such Interest Period.
Telerate Screen page 3750 means the display designated as page 3750 on the Dow Jones Telerate
Service (or such other page as may replace page 3750 on that service or such other service as may
be nominated by the BBA as the information vendor for the purpose of displaying BBA Interest
Settlement Rates for Sterling). If such rate does not appear on Telerate Screen page 3750 on any
relevant date for the determination of the Sterling LIBO Rate, the Sterling LIBO Rate shall be an
interest rate equal to the rate per annum of the average (rounded upward to the nearest whole
multiple of 1/100 of 1% per annum, if such average is not such a multiple) of the rate per annum at
which deposits in Sterling are offered to the principal office of the Administrative Agent in
London, England by prime banks in the London interbank market at 11:00 a.m. (London time) on the
first day of such Interest Period in an amount substantially equal to the Sterling Eurodollar Loan
comprising part of such Borrowing to be outstanding during such Interest Period.




          “Sterling Loans” shall mean the loans made hereunder denominated in Sterling in
accordance with Section 2.21.




          “Strike Price” shall mean, with respect to any item of Product, the amount of funds
required to be provided for the production of such item of Product under the relevant Completion
Guaranty.




          “Subordinated Debt” shall mean the Convertible Senior Subordinated Notes and other
Indebtedness issued after the date hereof which is subordinated to the Borrowers’ obligations to
the Administrative Agent and the Group Lenders under the Facility; provided, that
(i) at the time of issuance of any such other Indebtedness, the ratio (the “Subordinated Debt
Ratio”) of (A) the Borrowing Base to (B) all outstanding Loans plus the L/C Exposure
plus the aggregate amount of all Subordinated Debt (other than the Subordinated Debt
represented by the Convertible Senior Subordinated Notes), must not be less than 1.25 to 1, (ii)
the Borrowers shall demonstrate pro forma compliance with the covenants set forth in Section 6.19
through 6.21 hereof after giving effect to such Indebtedness, (iii) the agreements creating such
Indebtedness must not contain any covenants requiring maintenance of any prescribed financial
ratios or levels, (iv) such Indebtedness does not require any cash principal payments prior to one
year after the Maturity Date and (v) all other terms and conditions relating to such Indebtedness
(including, without limitation, subordination provisions, covenants and defaults) shall be
satisfactory to Administrative Agent.




          “Subsidiary” shall mean with respect to any Person, any corporation, association,
joint venture, partnership, limited liability company or other business entity (whether now
existing or hereafter organized) of which at least a majority of the voting stock or other




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ownership interests having ordinary voting power for the election of directors (or the
equivalent) is, at the time as of which any determination is being made, owned or controlled by
such Person or one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person; provided, however, that for purposes of this Agreement
(other than in the definition of Unrestricted Subsidiary and Inactive Subsidiary) and the
Fundamental Documents, neither an Unrestricted Subsidiary nor an Inactive Subsidiary shall be a
Subsidiary of any Credit Party.




          “Synthetic Purchase Agreement” means any swap, derivative or other agreement or
combination of agreements pursuant to which any Credit Party is or may become obligated to make (i)
any payment in connection with a purchase by any third party from a Person other than a Credit
Party of any Equity Interest in any Credit Party or any Subordinated Debt or (ii) any payment
(other than on account of a permitted purchase by it of any Equity Interest in any Credit Party or
any Subordinated Debt) the amount of which is determined by reference to the price or value at any
time of any Equity Interest in any Credit Party or any Subordinated Debt; provided that no
phantom stock or similar plan providing for payments only to current or former directors, officers
or employees of a Credit Party (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.




          “Total Commitment” shall mean the aggregate amount of the Commitments then in effect
of all Group Lenders, as such amount may be reduced from time to time in accordance with the terms
of this Credit Agreement.




          “Total Credit Exposure” shall mean an amount equal to (i) the aggregate principal
amount of all outstanding Loans hereunder and under Special Purpose Producer Credit Agreements,
plus (ii) the then current amount of L/C Exposure, plus (iii) the aggregate amount of the
unused Total Commitments then in effect.




          “Total Interest” shall mean the sum of (i) all interest expense (net of interest
income) of the Credit Parties computed and payable in accordance with GAAP and (ii) any interest
expense that has been capitalized other than as part of film and television costs during the
relevant period..




          “Total LGEI Commitment” shall mean the aggregate amount of the LGEI Commitments then
in effect of all the LGEI Lenders, as such may be reduced or increased from time to time in
accordance with the terms of this Credit Agreement.




          “Trademark Security Agreement” shall mean the Trademark Security Agreement
substantially in the form of Exhibit F-1 hereto to be executed by the Borrowers, as such agreement
may be amended, supplemented or otherwise modified, renewed or replaced from time to time.




          “Trademark Security Agreement Supplement” shall mean the Trademark Security Agreement
Supplement substantially in the form of Exhibit F-2 hereto.




          “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York on
the date of execution of this Credit Agreement.




          “UK Borrower” shall mean Lions Gate UK Limited.




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          “UK Borrower Commitment” shall mean the commitment of the UK Lender to make Loans to
the UK Borrower (in accordance with Section 2.21) in either U.S. Dollars or Sterling, from the
Initial Date applicable to the UK Lender through the Commitment Termination Date up to an aggregate
amount at any one time outstanding, such that the sum of the outstanding amount of U.S. Dollar
Loans to the UK Borrower plus the U.S. Dollar Equivalent of outstanding Sterling Loans does not
exceed the UK Sublimit, as such amount may be reduced from time to time in accordance with the
terms of this Credit Agreement.




          “UK Borrower Facility” shall mean a revolving credit facility providing for the making
of Sterling Loans and/or U.S. Dollar Loans to the UK Borrower in accordance with the UK Borrower
Commitment.




          “UK Lender” shall mean (i) J.P. Morgan Europe Ltd and (ii) any assignee of a UK Lender
pursuant to Section 13.3 hereof.




          “UK Borrower Loans” shall mean U.S. Dollar Loans and/or Sterling Loans, as applicable,
made to the UK Borrower in accordance with Section 2.21 hereof.




          “UK Sublimit” shall mean U.S.$20,000,000.




          “Uncompleted” shall mean not Completed.




          “Unrecouped Print and Advertising Expenses” shall mean with respect to an item of
Product produced for domestic theatrical release, the amount, if any, by which (a) print and
advertising expenses exceeds the sum of (i) total receipts from all domestic media and markets plus
(ii) receipts from all media and markets other than domestic media and markets after recoupment of
negative costs.




          “Unrestricted Subsidiary” shall mean each Subsidiary of LGEC listed in Schedule 3.7(d)
and any other Subsidiary of LGEC which is (i) acquired without the use of any of the proceeds from
the Loans or the issuance of any other Indebtedness and (ii) designated by the Borrowers as an
Unrestricted Subsidiary in a written notice to the Administrative Agent; provided,
however, that (A) after giving effect to such designation, no Default or Event of Default
shall be continuing at the time of such designation or on a pro forma basis as of the most recent
date for which a compliance certificate has been delivered pursuant to Section 5.1(a) hereof and
(B) the Borrowers may elect that any Unrestricted Subsidiary no longer remain an Unrestricted
Subsidiary by providing written notice thereof to the Administrative Agent along with an Instrument
of Assumption and Joinder executed by such former Unrestricted Subsidiary, appropriate UCC-1
financing statements, certificates representing all Pledged Securities owned by such former
Unrestricted Subsidiary together with an undated stock power executed in blank, corporate documents
to the extent set forth in Section 4.1(a) and, upon request, written opinions of counsel (which may
be an employee of, or counsel for, a Credit Party) in form and substance reasonably satisfactory to
the Administrative Agent; provided, further, that after giving effect to such
election, no Default or Event of Default shall be continuing at the time of such election or on a
pro forma basis as of the most recent date for which a compliance certificate has been delivered
pursuant to Section 5.1(a) hereof.




- 39 -









 








          “U.S. Dollar Equivalent” shall mean on any Business Day (i) with respect to any amount
which is denominated in Sterling, the amount in U.S. Dollars determined by converting Sterling into
U.S. Dollars at the Administrative Agent’s spot rate in effect at 11:00 a.m. (London Time) on such
Business Day and (ii) with respect to any amount that is denominated in a currency other than U.S.
Dollars and Sterling, the amount in U.S. Dollars determined by converting such other currency into
U.S. Dollars at the Administrative Agent’s spot rate in effect at 11:00 a.m. (London Time) on such
Business Day, as determined by the Administrative Agent; provided, however, the
Administrative Agent may, in its sole discretion adjust the U.S. Dollar Equivalent for any currency
other than U.S. Dollars and Sterling to reflect any hedging agreement in effect.




          “U.S. Dollar Loans” shall mean the Loans made hereunder denominated in U.S. Dollars to
LGEI, the UK Borrower and/or the Australia Borrower in accordance with Section 2.1, Section 2.21
and Section 2.22 hereof, respectively.




          “U.S. Dollars”, “U.S.$” and “$” shall mean lawful money of the United
States of America.




          “U.S. Eurodollar Loan” shall mean a Loan based on the LIBO Rate in accordance with the
provisions of Article 2.




          “U.S. Plan” shall mean an employee benefit plan within the meaning of Section 3(3) of
ERISA (other than a Multiemployer Plan), maintained or contributed to by any Credit Party, or any
ERISA Affiliate, or with respect to which any Credit Party could otherwise have any liability.




2. THE LOANS




     SECTION 2.1 Loans to LGEI.



          (a) Each LGEI Lender, severally and not jointly, agrees, upon the terms and subject to the
conditions hereof, to make U.S. Dollar Loans to LGEI on any Business Day and from time to time from
the Closing Date to but excluding the Commitment Termination Date, each in a principal amount which
when added to the aggregate principal amount of all U.S. Dollar Loans, Australian Dollar Loans and
Sterling Loans then outstanding to LGEI, the Australia Borrower and/or the UK Borrower from such
Group Lender, plus such Group Lender’s Pro Rata Share of the then current L/C Exposure and
the unused portion of the Special Production Tranche for all Designated Pictures for which Loans
have been made to LGEI, the Australia Borrower and/or the UK Borrower which have not yet been
Completed, does not exceed such Group Lender’s LGEI Commitment.




          (b) In addition to the U.S. Dollar Loans contemplated pursuant to Section 2.1(a) above, with
regard to each Designated Picture, each LGEI Lender, severally and not jointly, agrees upon the
terms and subject to the conditions hereof, to make U.S. Dollar Loans pursuant to the Special
Production Tranche, to LGEI or to a Special Purpose Producer, on any Business Day from time to time
from the Closing Date to but excluding the Commitment




- 40 -









 







Termination Date or such earlier time as that Designated Picture is Completed, each in an
aggregate principal amount which when added to the aggregate principal amount of all U.S. Dollar
Loans then outstanding with regard to that Designated Picture under the Special Production Tranche,
does not exceed such Group Lender’s Pro Rata Share of the aggregate LGEI Commitments then reserved
as part of the Special Production Tranche for such Designated Picture.




          (c) Notwithstanding anything to the contrary above, a LGEI Lender shall not be obligated to
make any U.S. Dollar Loan or to incur any incremental L/C Exposure if, as a result thereof, either
(i) the sum of the aggregate principal amount of all U.S. Dollar Loans and the U.S. Dollar
Equivalent of all Sterling Loans and Australian Dollar Loans then outstanding plus the then
current L/C Exposure plus the unused portion of the Special Production Tranche for all
Designated Pictures for which U.S. Dollar Loans and the U.S. Dollar Equivalent of all Sterling
Loans and Australian Dollar Loans made to LGEI which have not yet been Completed would exceed the
Total LGEI Commitment then in effect or (ii) the sum of the aggregate principal amount of all U.S.
Dollar Loans and the U.S. Dollar Equivalent of all Sterling Loans and Australian Dollar Loans then
outstanding plus the then current L/C Exposure plus the unused portion of the
Special Production Tranche for all Designated Pictures which have not yet been Completed would
exceed the Borrowing Base.




          (d) Subject to the terms and conditions of this Credit Agreement, at any time prior to the
Commitment Termination Date, LGEI may borrow, repay and re-borrow amounts constituting the LGEI
Commitments.




          (e) Each U.S. Dollar Loan under this Section 2.1 shall be either an Alternate Base Rate Loan
or Eurodollar Loan (each such type of Loan, an “Interest Rate Type”) as LGEI may request.
Subject to Section 2.13(d), each LGEI Lender may at its option fulfill its LGEI Commitment with
respect to any Eurodollar Loan by causing a foreign branch or affiliate to make such U.S. Dollar
Loan, provided that any exercise of such option shall not affect the obligation of LGEI to repay
such U.S. Dollar Loan in accordance with the terms hereof and of the relevant Note. Subject to the
other provisions of this Section and Sections 2.10(b), 2.13 and 2.14, U.S. Dollar Loans of more
than one Interest Rate Type may be outstanding at the same time.




          (f) Each U.S. Dollar Loan requested under this Section 2.1 on any date shall be made by each
LGEI Lender in accordance with its respective Percentage.




          (g) LGEI shall give the Administrative Agent prior written, facsimile or telephonic (promptly
confirmed in writing) notice of each Borrowing hereunder. Each such notice shall be irrevocable and
to be effective, must be received by the Administrative Agent not later than 2:00 p.m., New York
City time, (i) in the case of Alternate Base Rate Loans, on the Business Day preceding the date on
which such Loan is to be made and (ii) in the case of Eurodollar Loans, on the third Business Day
preceding the date on which such U.S. Dollar Loan is to be made. Such notice shall specify (A) the
amount of the requested U.S. Dollar Loan, (B) the date on which such U.S. Dollar Loan is to be made
(which shall be a Business Day), (C) whether the U.S. Dollar Loan then being requested is to be (or
what portion or portions thereof are to be) an Alternate Base Rate Loan or a Eurodollar Loan and
the Interest Period or Interest



- 41 -









 






Periods with respect thereto in the case of Eurodollar Loans and (D) if applicable, the
portion of the requested U.S. Dollar Loans to be made under the Special Production Tranche. In the
case of a Eurodollar Loan, if no election of an Interest Period is specified in such notice, such
notice shall be deemed a request for an Interest Period of one month. If no election is made as to
the Interest Rate Type of any U.S. Dollar Loan, such notice shall be deemed a request for an
Alternate Base Rate Loan.




          (h) The Administrative Agent shall promptly notify each LGEI Lender of its proportionate share
of each Borrowing, the date of such Borrowing, the Interest Rate Type of each U.S. Dollar Loan
being requested and the Interest Periods applicable thereto. On the borrowing date specified in
such notice, each LGEI Lender shall make its share of the Borrowing available at the office of
JPMorgan Chase Bank, Loan and Agency Services Group, 10 South Dearborn, Floor 7, Chicago, Illinois
60603, Attention: LaTanya Driver for credit to the Clearing Account and in each case, no later than
12:00 noon New York City time, in Federal or other immediately available funds. Upon receipt of
the funds to be made available by the LGEI Lenders to fund any Borrowing of U.S. Dollar Loans
hereunder, the Administrative Agent shall disburse such funds by depositing the requested amounts
into an account specified by LGEI provided, however, that if the Borrowing
Certificate for any particular Borrowing indicates that it is to be made under a Special Production
Tranche, then the Administrative Agent shall deposit the proceeds of such Loan directly into the
Production Account for the Designated Picture relating to such Special Production Tranche.




          (i) Notwithstanding any provision to the contrary in this Credit Agreement, LGEI shall not, in
any notice of borrowing under this Section 2.1 request any Eurodollar Loan which, if made, would
result in an aggregate of more than twenty (20) separate Eurodollar Loans of any LGEI Lender being
outstanding hereunder at any one time. For purposes of the foregoing, Eurodollar Loans having
Interest Periods commencing or ending on different days shall be considered separate Eurodollar
Loans.




          (j) The aggregate amount of any Borrowing under the LGEI Facility consisting of Eurodollar
Loans shall be in a minimum aggregate principal amount of U.S.$1,000,000 or such greater amount
which is an integral multiple of U.S.$100,000 and the aggregate amount of any Borrowing under LGEI
Facility consisting of Alternate Base Rate Loans shall be in a minimum aggregate principal amount
of U.S.$500,000 or such greater amount which is an integral multiple of U.S.$100,000 (or such
lesser amount as shall equal (i) the available but unused portion of the Total LGEI Commitment then
in effect or (ii) the amount of any Borrowing to fund drawings under Letters of Credit).




          (k) Notwithstanding the provisions of clause (g) above and/or the absence of a request from
the Borrower that the Group Lenders make a Loan, the Required Lenders may direct the Group Lenders
to make Loans and apply the proceeds thereof as follows:




               (i) if the Approved Completion Guarantor for any item of Product being produced by a Credit
Party or for which receivables are included in the Borrowing Base shall take over production of
such item of Product pursuant to the Completion Guaranty with respect to such item of Product, to
make Loans up to the Strike Price with respect to the production of such item of Product and pay
the proceeds thereof directly to the Approved



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Completion Guarantor to be used to finance the production and delivery of such item of Product
pursuant to the terms of the Completion Guaranty; and




               (ii) if an Event of Default shall have occurred and be continuing, to make Loans with respect
to any item of Product being produced by a Credit Party or for which receivables are included in
the Borrowing Base and pay the proceeds thereof directly to Persons providing services in
connection with the production, delivery and distribution of such Product so as to ensure
Completion of such item of Product and/or the collection of Eligible Receivables.



          (l) Notwithstanding anything to the contrary above, a LGEI Lender shall not be obligated to
make any U.S. Dollar Loan or to incur any incremental L/C Exposure if, as a result thereof, the sum
of the aggregate principal amount of all U.S. Dollar Loans then outstanding plus the then
current L/C Exposure plus the U.S. Dollar Equivalent of the aggregate principal amount of
all Sterling Loans and Australian Dollar Loans then outstanding plus the unused portion of
the Special Production Tranche for all Designated Pictures which have not yet been Completed would
exceed either (i) the Total Commitment or (ii) the Borrowing Base.




     SECTION 2.2 Intentionally Omitted.



     SECTION 2.3 Intentionally Omitted.



     SECTION 2.4 Intentionally Omitted.



     SECTION 2.5 Notes; Repayment. Any Lender may request that the Loans made by such
Lender hereunder be evidenced by a promissory note substantially in the form of Exhibit A hereto
(each a “Note”). In such event the Borrowers shall prepare a Note in the face amount of
each such Group Lender’s Commitment, payable to the order of each such Group Lender, duly executed
on behalf of LGEI, the UK Borrower and the Australia Borrower, as applicable, and dated as of the
date hereof. The outstanding principal balance of each U.S. Dollar Loan, Sterling Loan and
Australian Dollar Loan shall be payable in full on the Maturity Date, subject to mandatory
prepayment as provided in Section 2.12 hereof and acceleration as provided in Article 7 hereof.



     SECTION 2.6 Letters of Credit.



          (a) Upon the terms and subject to the conditions hereof and of Applicable Law, the Issuing
Bank agrees, upon the request of LGEI, to issue Letters of Credit (and to extend Letters of Credit
previously issued hereunder) payable in U.S. Dollars or any other foreign currency acceptable to
the Administrative Agent from time to time after the Closing Date and prior to the Commitment
Termination Date, provided, however, that (A) LGEI shall not request, and the
Issuing Bank shall not issue, any Letter of Credit if, after giving effect thereto, either (i) (x)
the sum of the aggregate principal amount of all U.S. Dollar Loans and the U.S. Dollar Equivalent
of all Sterling Loans and Australian Dollar Loans then outstanding, in the case of Letters of
Credit issued to LGEI plus the then current L/C Exposure plus the unused portion of
the Special Production Tranche for all Designated Pictures attributable to Loans made to LGEI, as
applicable, which have not yet been Completed would exceed the Total LGEI Commitment then in
effect, (ii) the sum of the aggregate principal amount of all U.S. Dollar Loans and the U.S. Dollar
Equivalent of all Sterling Loans and Australian Dollar Loans then outstanding plus




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the then current L/C Exposure would exceed the Borrowing Base, or (iii) the then current L/C
Exposure would exceed $100,000,000 and (B) LGEI shall not request, and the Issuing Bank shall not
issue (or extend), any Letter of Credit having an expiration date (x) later than the tenth day
prior to the Commitment Termination Date or (y) more than one year after its date of issuance (or
extension). The Administrative Agent acknowledges that as of the date hereof Sterling and the
Australian Dollar shall be ‘other foreign currency acceptable to the Administrative Agent’ for the
issuance of Letters of Credit in accordance with the first sentence of this Section 2.6(a).




               (i) Immediately upon the issuance of each Letter of Credit, each LGEI Lender shall be deemed
to, and hereby agrees to, have irrevocably purchased from the Issuing Bank a participation in such
Letter of Credit in accordance with such LGEI Lender’s Percentage.



               (ii) Each Letter of Credit may, at the option of the Issuing Bank, provide that the Issuing
Bank may (but shall not be required to) pay all or any part of the maximum amount which may at any
time be available for drawing thereunder to the beneficiary thereof upon the occurrence or
continuation of an Event of Default and the acceleration of the maturity of the U.S. Dollar Loans,
as applicable, provided that, if payment is not then due to the beneficiary, the Issuing Bank shall
deposit the funds in question in a segregated account with the Issuing Bank to secure payment to
the beneficiary and any funds so deposited shall be paid to the beneficiary of the Letter of Credit
if conditions to such payment are satisfied or returned to the Issuing Bank for distribution to the
Group Lenders (or, if all Obligations shall have been paid in full in cash, to LGEI) if no payment
to the beneficiary has been made and the final date available for drawings under the Letter of
Credit has passed. Each payment or deposit of funds by the Issuing Bank as provided in this
paragraph shall be treated for all purposes of this Credit Agreement as a drawing duly honored by
such Issuing Bank under the related Letter of Credit.



          (b) Whenever LGEI desires the issuance of a Letter of Credit, it shall deliver to the
Administrative Agent and the Issuing Bank a written notice no later than 2:00 p.m. (New York City
time) at least three (3) Business Days prior to the proposed date of issuance. That notice shall
specify (i) the proposed date of issuance (which shall be a Business Day), (ii) the face amount of
the Letter of Credit, (iii) the expiration date of the Letter of Credit and (iv) the name and
address of the beneficiary. Such notice shall be accompanied by a brief description of the
underlying transaction and upon request of the Issuing Bank or the Administrative Agent, LGEI shall
provide additional details regarding the underlying transaction. Concurrently with the giving of
written notice of a request for the issuance of a Letter of Credit, LGEI shall provide a precise
description of the documents and the verbatim text of any certificate to be presented by the
beneficiary of such Letter of Credit which, if presented by such beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing Bank to make payment under the
Letter of Credit; provided, however, that the Issuing Bank, in its reasonable
discretion, may require customary changes in any such documents and certificates to be presented by
the beneficiary. Upon issuance of each Letter of Credit to LGEI, the Issuing Bank shall notify the
Administrative Agent of the issuance of such Letter of Credit. Promptly after receipt of such
notice, the Administrative Agent shall notify each LGEI Lender of the issuance and the amount of
such LGEI Lender’s respective participation in the applicable Letter of Credit.




          (c) The acceptance and payment of drafts under any Letter of Credit shall be made in
accordance with the terms of such Letter of Credit and the Uniform Customs and




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Practice for Documentary Credits, International Chamber of Commerce Publication No. 500, as
adopted or amended from time to time. The Issuing Bank shall be entitled to honor any drafts and
accept any documents presented to it by the beneficiary of such Letter of Credit in accordance with
the terms of such Letter of Credit and believed by the Issuing Bank in good faith to be genuine.
Except as otherwise required by Applicable Law which cannot be waived, the Issuing Bank shall not
have any duty to inquire as to the accuracy or authenticity of any draft or other drawing documents
which may be presented to it, but shall be responsible only to determine in accordance with
customary commercial practices that the documents which are required to be presented before payment
or acceptance of a draft under any Letter of Credit have been delivered and that they comply on
their face with the requirements of that Letter of Credit.




          (d) If the Issuing Bank shall make payment on any draft presented under a Letter of Credit
(regardless of whether a Default, Event of Default or acceleration has occurred), the Issuing Bank
shall give notice of such payment to the Administrative Agent and the LGEI Lenders, and each LGEI
Lender hereby authorizes and requests the Issuing Bank to advance for its account, pursuant to the
terms hereof, its share of such payment based upon its participation in the Letter of Credit and
agrees promptly to reimburse the Issuing Bank in immediately available funds for the Dollar
equivalent of the amount so advanced on its behalf by the Issuing Bank. If any such reimbursement
is not made by any LGEI Lender in immediately available funds on the same day on which the Issuing
Bank shall have made payment on any such draft, such Group Lender shall pay interest thereon to the
Issuing Bank at a rate per annum equal to the Issuing Bank’s cost of obtaining overnight funds in
the New York Federal Funds Market for the three (3) Business Days following the time such Group
Lender fails to make the reimbursement and thereafter at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin.




          (e) The Borrowers are absolutely, unconditionally and irrevocably obligated to reimburse all
amounts drawn under each Letter of Credit. If any draft is presented under a Letter of Credit, the
payment of which is required to be made at any time on or before the Commitment Termination Date,
then payment by the Issuing Bank of such draft shall constitute an Alternate Base Rate Loan in an
amount equal to the U.S. Dollar amount or the U.S. Dollar Equivalent of the Sterling amount or
Australian Dollar amount, as applicable, drawn under the Letter of Credit hereunder and interest
shall accrue from the date the Issuing Bank makes payment on such draft under such Letter of
Credit. If any draft is presented under a Letter of Credit, the payment of which is required to be
made after the Commitment Termination Date or at the time when an Event of Default or Default shall
have occurred and then be continuing, then the Borrowers shall immediately pay to the Issuing Bank,
in immediately available funds in the currency in which such Letter of Credit was issued, the full
amount of such draft together with interest thereon at a rate per annum of 2% in excess of the rate
then in effect for Alternate Base Rate Loans from the date on which the Issuing Bank makes such
payment of such draft until the date it receives full reimbursement for such payment from LGEI.
LGEI further agrees that the Issuing Bank may reimburse itself for such drawing from the balance in
the Clearing Account or from the balance in any other account of the Borrowers maintained with the
Issuing Bank.




          (f) The Borrowers agree to pay the following amounts to the Issuing Bank for its own account
with respect to Letters of Credit issued by it hereunder:




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                    (A) with respect to the issuance, amendment or transfer of each Letter of Credit and each
drawing made thereunder, documentary and processing charges in accordance with the Issuing Bank’s
standard schedule for such charges in effect at the time of such issuance, amendment, transfer or
drawing, as the case may be; and



                    (B) a fronting fee payable to the Issuing Bank for the period from and including the Closing
Date to, but excluding, the Maturity Date, computed at a rate equal to 1/4 of 1% per annum of the
daily average L/C Exposure (calculated on the basis of a 360-day year), such fee to be due and
payable in arrears on and through the last Business Day of each March, June, September and December
in each year (commencing on the last Business Day of September, 2008) prior to the Maturity Date or
the expiration of the last outstanding Letter of Credit (whichever is later) and on the later of
the Maturity Date and the expiration of the last outstanding Letter of Credit.



          (g) The Borrowers agree to pay to the Administrative Agent for distribution to each Group
Lender in respect of its L/C Exposure, such Group Lender’s Pro Rata Share of a commission
(calculated on the basis of a 360-day year) equal to (A) a per annum percentage rate equal to the
Applicable Margin for Eurodollar Loans multiplied by (B) the average daily amount of the L/C
Exposure. Such commission shall be due and payable in arrears on and through the last Business Day
of each March, June, September and December (commencing the last Business Day of September, 2008)
prior to the Maturity Date or the expiration of the last outstanding Letter of Credit (whichever is
later) and on the later of the Maturity Date and the expiration of the last outstanding Letter of
Credit;




          (h) Promptly upon receipt by the Issuing Bank or the Administrative Agent of any amount
described in clause (B) of Section 2.6(f) or any amount described in Section 2.6(e) previously
reimbursed to the Issuing Bank by the LGEI Lenders, the Issuing Bank or the Administrative Agent
(as applicable) shall distribute to each Group Lender its Pro Rata Share of such amount.




          (i) If by reason of (i) any change in Applicable Law after the Initial Date, or in the
interpretation or administration thereof (including, without limitation, any request, guideline or
policy not having the force of law) by any Governmental Authority charged with the administration
or interpretation thereof, or (ii) compliance by the Issuing Bank or any Group Lender with any
direction, request or requirement (whether or not having the force of law) issued after the Closing
Date by any Governmental Authority or monetary authority, including, without limitation, any change
whether or not proposed or published prior to the Initial Date and any modifications to Regulation
D occurring after the Initial Date:




                    (A) the Issuing Bank or any Group Lender shall be subject to any tax, levy, impost, duty, fee,
charge, deduction or withholding of any nature with respect to any Letter of Credit (other than
withholding tax imposed by the United States of America, Canada or any political subdivision or
taxing authority thereof or therein or any other tax, levy, impost, duty, fee, charge, deduction or
withholding (1) that is measured with respect to the overall net income of the Issuing Bank or such
Group Lender or of a Lending Office of the Issuing Bank or such Group Lender, and that is imposed
by the United States of America, Canada or by the jurisdiction in which the Issuing Bank or such
Group Lender is incorporated or



- 46 -









 




carries on business, or in which such Lending Office is located, managed or controlled or in
which the Issuing Bank or such Group Lender has its principal office or a presence which is not
otherwise connected with, or required by, this transaction (or any political subdivision or taxing
authority thereof or therein) or (2) that is imposed solely by reason of the Issuing Bank or such
Group Lender failing to make a declaration of, or otherwise to establish, non-residence or to make
any other claim for exemption, or otherwise to comply with any certification, identification,
information, documentation or reporting requirements prescribed under the laws of the relevant
jurisdiction, in those cases where the Issuing Bank or such Group Lender may properly make the
declaration or claim or so establish non-residence or otherwise comply), or to any variation
thereof or to any penalty with respect to the maintenance or fulfillment of its obligations under
this Section 2.6, whether directly or by such being imposed on or suffered by the Issuing Bank or
any Group Lender;




                    (B) the basis of taxation of any fee or amount payable hereunder with respect to any Letter of
Credit or any participation therein shall be changed, other than withholding tax imposed by the
United States of America or Canada as applicable, or any political subdivision or taxing authority
thereof or therein or any other tax, levy, impost, duty, charge, fee, deduction or withholding that
is measured with respect to the overall net income of such Group Lender or of a Lending Office of
such Group Lender, and that is imposed by the United States of America or Canada or by the
jurisdiction in which such Group Lender or Lending Office is incorporated or carries on business,
in which such Lending Office is located, managed or controlled or in which such Group Lender has
its principal office or a presence not otherwise connected with, or required by, this transaction
(or any political subdivision or taxing authority thereof or therein);



                    (C) any reserve, deposit or similar requirement is or shall be applicable, imposed or modified
in respect of any Letter of Credit issued by the Issuing Bank or participations therein purchased
by any Group Lender; or



                    (D) there shall be imposed on the Issuing Bank or any Group Lender any other condition
regarding this Section 2.6, any Letter of Credit or any participation therein;


and the result of the foregoing is to directly or indirectly increase the cost to the Issuing Bank
or any Group Lender of issuing, making or maintaining any Letter of Credit or of purchasing or
maintaining any participation therein, or to reduce the amount receivable in respect thereof by the
Issuing Bank or any Group Lender, then and in any such case the Issuing Bank or such Group Lender
may, at any time, notify the Borrowers, and the Borrowers shall promptly pay the Issuing Bank or
such Group Lender upon its demand such amounts as the Issuing Bank or such Group Lender may specify
to be necessary to compensate the Issuing Bank or such Group Lender for such additional cost or
reduced receipt. Sections 2.13(b), (c) and (d) shall in all instances apply to the Issuing Bank
and any Group Lender with respect to the Letters of Credit issued hereunder. The determination by
the Issuing Bank or any Group Lender, as the case may be, of any amount due pursuant to this
Section 2.6 as set forth in a certificate setting forth the calculation thereof in reasonable
detail shall, in the absence of manifest error, be final, conclusive and binding on all of the
parties hereto.




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          (j) If at any time when an Event of Default shall have occurred and be continuing, any Letters
of Credit shall remain outstanding, then the Administrative Agent may, and if directed by the
Required Lenders shall, require the Borrowers to deliver to the Administrative Agent Cash
Equivalents in an amount equal to the full amount of the L/C Exposure or to furnish other security
acceptable to the Required Lenders. Any amounts so delivered pursuant to the preceding sentence
shall be applied to reimburse the Issuing Bank for the amount of any drawings honored under Letters
of Credit; provided, however, that if prior to the Maturity Date, (i) no Default or
Event of Default is then continuing, then the Administrative Agent shall return all of such
collateral relating to such deposit to the Borrowers if requested by it or (ii) Letters of Credit
shall expire or be returned by the beneficiary so that the amount of the Cash Equivalents delivered
to the Administrative Agent hereunder shall exceed the then current L/C Exposure, then such excess
shall first be applied to pay any Obligations then due under this Credit Agreement and the
remainder shall be returned to the Borrowers.




          (k) Notwithstanding the termination of the Commitments and the payment of the Loans, the
obligations of the Borrowers under this Section 2.6 shall remain in full force and effect until the
Administrative Agent, the Issuing Bank and the Group Lenders shall have been irrevocably released
from their obligations with regard to any and all Letters of Credit.




          (l) Notwithstanding anything to the contrary above, LGEI shall not request, and the Issuing
Bank shall not issue, any Letter of Credit if, after giving effect thereto, the sum of the
aggregate principal amount of all U.S. Dollar Loans then outstanding plus the then current
L/C Exposure plus the U.S. Dollar Equivalent of the aggregate principal amount of all
Sterling Loans and Australian Dollar Loans then outstanding plus the unused portion of the
Special Production Tranche for all Designated Pictures which have not yet been Completed would
exceed either (i) the Total Commitment or (ii) the Borrowing Base.




     SECTION 2.7 Interest.



          (a) In the case of an Alternate Base Rate Loan, interest shall be payable at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 365/366 days, as the
case may be, during such times as the Alternate Base Rate is based upon the Prime Rate, and over a
year of 360 days at all other times) equal to the Alternate Base Rate plus the Applicable Margin
for Alternate Base Rate Loans. Interest shall be payable in arrears on each Alternate Base Rate
Loan on each applicable Interest Payment Date and on the Maturity Date.




          (b) In the case of a U.S. Eurodollar Loan, interest shall be payable at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the
LIBO Rate plus the Applicable Margin for U.S. Eurodollar Loans. Interest shall be payable on each
U.S. Eurodollar Loan on each applicable Interest Payment Date, on the Maturity Date and on the date
of a conversion of such U.S. Eurodollar Loan to an Alternate Base Rate Loan. The Administrative
Agent shall determine the applicable LIBO Rate for each Interest Period as soon as practicable on
the date when such determination is to be made in respect of such Interest Period and shall
promptly notify the Borrowers and the Group Lenders of the applicable interest rate so determined.
Such determination shall be conclusive absent manifest error.




- 48 -









 








          (c) In the case of a Sterling Eurodollar Loan, interest shall be payable at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 365 days) equal to the
Sterling LIBO Rate plus the Applicable Margin for Sterling Eurodollar Loans plus Mandatory Cost.
Interest shall be payable on each Sterling Eurodollar Loan on each applicable Interest Payment Date
and on the Maturity Date. The Administrative Agent shall determine the applicable Sterling LIBO
Rate for each Interest Period as soon as practicable on the date when such determination is to be
made in respect of such Interest Period and shall promptly notify the Borrowers and the Group
Lenders of the applicable interest rate so determined. Such determination shall be conclusive
absent manifest error.




          (d) In the case of an Australian Dollar Eurodollar Loan, interest shall be payable at a rate
per annum (computed on the basis of the actual number of days elapsed over a year of 360 days)
equal to the Australian Dollar LIBO Rate plus the Applicable Margin for Australian Dollar
Eurodollar Loans. Interest shall be payable on each Australian Dollar Eurodollar Loan on each
applicable Interest Payment Date and on the Maturity Date. The Administrative Agent shall
determine the applicable Australian Dollar LIBO Rate for each Interest Period as soon as
practicable on the date when such determination is to be made in respect of such Interest Period
and shall promptly notify the Borrowers and the Group Lenders of the applicable interest rate so
determined. Such determination shall be conclusive absent manifest error.




          (e) Interest in respect of any Loan hereunder shall accrue from and including the date of such
Loan to but excluding the date on which such Loan is paid or, if applicable, converted to a Loan of
a different Interest Rate Type.




          (f) Anything in this Credit Agreement or the Notes to the contrary notwithstanding, the
interest rate on the Loans or with respect to any drawing under a Letter of Credit shall in no
event be in excess of the maximum rate permitted by Applicable Law.




     SECTION 2.8 Commitment Fee and Other Fees.



          (a) LGEI agrees to pay to the Administrative Agent for the account of each LGEI Lender on the
last Business Day of each March, June, September and December in each year (commencing on the last
Business Day of September 2008) and on the date of any termination or reduction of the LGEI
Commitment, as applicable, and on the Commitment Termination Date, a fee (the “Commitment
Fee” and collectively, for all the Lenders, the “Commitment Fees”) as follows:




                    (A) in the event that the sum of (i) the average amount of the outstanding Loans and (ii) the
average L/C Exposure during the previous period or quarter were equal to or less than 50% of the
Total Commitment, an amount equal to 0.50% per annum (computed on the basis of the actual number of
days elapsed during the preceding period or quarter over a year of 360 days) on the average daily
amount during the preceding period or quarter by which such Group Lender’s Commitment (as such
Commitment may be reduced in accordance with the provisions of this Credit Agreement) exceeded the
sum of such Group Lender’s Pro Rata Share of the L/C Exposure plus the aggregate principal
amount of such Group Lender’s outstanding Loans.



- 49 -









 





                    (B) in the event that the sum of (i) the average amount of the outstanding Loans and (ii) the
average L/C Exposure during the previous period or quarter were greater than 50% of the Total
Commitment, an amount equal to 0.375% per annum (computed on the basis of the actual number of days
elapsed during the preceding period or quarter over a year of 360 days) on the average daily amount
during the preceding period or quarter by which such Group Lender’s Commitment (as such Commitment
may be reduced in accordance with the provisions of this Credit Agreement) exceeded the sum of such
Group Lender’s Pro Rata Share of the L/C Exposure plus the aggregate principal amount of
such Group Lender’s outstanding Loans.



          (b) The Commitment Fees shall commence to accrue on the date this Credit Agreement is executed
by all the parties hereto.




          (c) In addition, LGEI agrees to pay to the Administrative Agent, on the date this Credit
Agreement is executed by all the parties hereto, any and all fees that are then due and payable
pursuant to the Fee Letter;




     SECTION 2.9 Termination and/or Reduction of the Commitments.



          (a) Upon at least three (3) Business Days’ prior written, facsimile or telephonic notice
(provided that such telephonic notice is immediately followed by written confirmation) to the
Administrative Agent, the Borrowers may at any time in whole permanently terminate, or from time to
time in part permanently reduce, the Total Commitment. In the case of a partial reduction, each
reduction of the Total Commitment shall be in a minimum aggregate principal amount of
U.S.$5,000,000 and an integral multiple of U.S.$1,000,000; provided, however, that
the Total Commitment may not be reduced to an amount less than the sum of the aggregate principal
amount of all U.S. Dollar Loans then outstanding, plus the then current L/C Exposure
plus the unused portion of a Special Production Tranche for all Designated Pictures for
which Loans have been made to LGEI which have not been Completed plus the U.S. Dollar
Equivalent of the aggregate principal amount of all Sterling Loans and Australian Dollar Loans then
outstanding. Any partial reduction of the Total Commitment shall be made among the Lenders ratably
in accordance with their respective Percentages.




          (b) Intentionally Omitted




          (c) Simultaneously with each such termination or reduction of the Total LGEI Commitment, the
Borrowers shall pay to the Administrative Agent for the benefit of the relevant Group Lenders all
accrued and unpaid Commitment Fees on the amount of the Commitments so terminated or reduced
through the date of such termination or reduction.




     SECTION 2.10 Default Interest; Alternate Rate of Interest.



          (a) So long as an Event of Default shall have occurred and be continuing (after, as well as
before judgment), the Borrowers shall on demand from time to time pay interest, to the extent
permitted by Applicable Law, on any then unpaid amount of the Obligations at a rate per annum (i)
for the remainder of the then current Interest Period for each Eurodollar Loan, at 2% in excess of
the rate then in effect for each such Eurodollar Loan and (ii)




- 50 -









 







for each Alternate Base Rate Loan, at 2% in excess of the rate then in effect for each such
Alternate Base Rate Loan.




          (b) In the event, and on each occasion, that on or before the day on which the LIBO Rate,
Australian Dollar LIBO Rate or Sterling LIBO Rate for a Eurodollar Loan, as applicable, is to be
determined as set forth herein, (i) the Administrative Agent shall have received notice from any
LGEI Lender, UK Lender or Australia Lender, as applicable, of such Group Lender’s determination
(which determination, absent manifest error, shall be conclusive) that Dollar deposits in an amount
equal to the principal amount of such Group Lender’s Eurodollar Loan are not generally available in
the London Interbank Market or that the rate at which such Dollar deposits are being offered will
not adequately and fairly reflect the cost to such Group Lender of making or maintaining the
principal amount of such Group Lender’s Eurodollar Loan during the applicable Interest Period or
(ii) the Administrative Agent shall have determined that reasonable means do not exist for
ascertaining the applicable LIBO Rate, Australian Dollar LIBO Rate or Sterling LIBO Rate, as
applicable, the Administrative Agent shall, as soon as practicable thereafter, give written or
facsimile notice of such determination by such Group Lender or the Administrative Agent, to the
Borrowers and the Group Lenders and any request by the Borrowers for a Eurodollar Loan pursuant to
Section 2.1, Section 2.21 or Section 2.22 or conversion to or continuation as a Eurodollar Loan
pursuant to Section 2.11, made after receipt of such notice and until the circumstances giving rise
to such notice no longer exist, shall be deemed to be a request for an Alternate Base Rate Loan in
the case of a U.S. Dollar Loan; provided, however, that in the circumstances
described in clause (i) above, such deemed request shall only apply to the affected Group Lender’s
portion thereof.




     SECTION 2.11 Continuation and Conversion of Loans. The Borrowers shall have the right
(i) at any time to convert any Eurodollar Loan or portion thereof to an Alternate Base Rate Loan or
to continue any Eurodollar Loan or portion thereof for a successive Interest Period and (ii) at any
time to convert any Alternate Base Rate Loan or portion thereof to a Eurodollar Loan, subject to
the following:



          (a) the Borrowers shall give (i) the Administrative Agent prior written, facsimile or
telephonic (promptly confirmed in writing) notice of at least three (3) Business Days of each
continuation or conversion of U.S. Dollar Loans hereunder and (ii) J.P. Morgan Europe Limited (with
a copy to the Administrative Agent) prior written notice of at least three (3) Business Days of
each continuation of Sterling Loans and/or Australian Dollar Loans. Each such notice shall be
irrevocable and to be effective, must be received by the Administrative Agent on the day required
not later than 2:00 p.m. New York City time in the case of any U.S. Dollar Loan or 11:00 a.m.
(London time) in the case of any Sterling Loan or any Australian Dollar Loan;




          (b) no Event of Default or Default shall have occurred and be continuing at the time of any
conversion to a Eurodollar Loan or continuation of a Eurodollar Loan into a subsequent Interest
Period;




          (c) the aggregate principal amount of Loans continued as, or converted to, Eurodollar Loans as
part of the same continuation or conversion, shall be in a minimum amount



- 51 -









 






of U.S.$1,000,000 or the U.S. Dollar Equivalent thereof or in such greater amount which is an
integral multiple of U.S.$100,000 or the U.S. Dollar Equivalent thereof;




          (d) Intentionally omitted;




          (e) if fewer than all U.S. Dollar Loans at the time outstanding shall be continued or
converted, such continuation or conversion shall be made pro rata among the LGEI Lenders in
accordance with the respective Percentage of the principal amount of such Loans held by such Group
Lenders immediately prior to such continuation or conversion;




          (f) no Alternate Base Rate Loan (or portion thereof) may be converted to a Eurodollar Loan and
no Eurodollar Loan may be continued as a Eurodollar Loan if, after such conversion or continuation,
and after giving effect to any concurrent prepayment of U.S. Dollar Loans, Australian Dollar Loans
or Sterling Loans, as applicable, an aggregate of more than twenty (20) separate Eurodollar Loans
would be outstanding under Facility (for purposes of determining the number of such Loans
outstanding, Loans with different Interest Periods shall be counted as different Eurodollar Loans
even if made on the same date);




          (g) Intentionally omitted;




          (h) the Interest Period with respect to a new Eurodollar Loan effected by a continuation or
conversion shall commence on the date of such continuation or conversion;




          (i) if a Eurodollar Loan is converted to an Alternate Base Rate Loan other than on the last
day of the Interest Period with respect thereto, the amounts required by Section 2.12 shall be paid
upon such conversion;




          (j) accrued interest on a Eurodollar Loan (or portion thereof) being converted to an Alternate
Base Rate Loan shall be paid by the Borrowers at the time of conversion; and




          (k) each request for a continuation as, or conversion to, a Eurodollar Loan which fails to
state an applicable Interest Period shall be deemed to be a request for an Interest Period of one
month;




          (l) Intentionally omitted;




          (m) Intentionally omitted;




          (n) Intentionally omitted;




          (o) In the event that the Borrowers shall not give written notice to continue any Sterling
Loan or Australian Dollar Loan as provided above, unless such Loan is repaid, the relevant Borrower
shall be deemed to have requested a continuation as a Sterling Eurodollar Loan or an Australian
Dollar Eurodollar Loan (as applicable) with an Interest Period of one month. In the event that the
Borrowers shall not give notice to continue or convert any U.S. Dollar Loan as provided above,
unless such Loan is repaid, such Loan shall automatically be (i) continued as a Eurodollar Loan
with an Interest Period of one month or (ii) converted to an Alternate Base Rate Loan at the
expiration of the then current Interest Period in the




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Administrative Agent’s discretion. The Administrative Agent shall, after it receives notice
from any of the Borrowers, promptly give the LGEI Lenders notice of any continuation, rollover or
conversion.




     SECTION 2.12 Prepayment of Loans; Reimbursement of Group Lenders.



          (a) Intentionally Omitted.




          (b) Subject to the terms of Section 2.12(e), (A) the applicable Borrower shall have the right
at its option at any time and from time to time to prepay (i) any Alternate Base Rate Loan, in
whole or in part, upon at least one Business Day’s written, telephonic (promptly confirmed in
writing) or telegraphic notice, in the principal amount of U.S.$1,000,000 or such greater amount
which is an integral multiple of U.S.$100,000 and (ii) any U.S. Eurodollar Loan, in whole or in
part, upon at least three Business Days’ written, telephonic (promptly confirmed in writing) or
telegraphic notice, in the principal amount of U.S.$1,000,000 or such greater amount which is an
integral multiple of U.S.$500,000, (B) the UK Borrower shall have the right at its option at any
time and from time to time to prepay any Sterling Eurodollar Loan, in whole or in part, upon at
least three Business Days’ written notice, in the principal amount of £500,000 or such greater
amount which is an integral multiple of £100,000 and (C) the Australian Borrower shall have the
right at its option at any time and from time to time to prepay any Australian Dollar Eurodollar
Loan, in whole or in part, upon at least three Business Days’ written notice, in the principal
amount of AU$500,000 or such greater amount which is an integral multiple of AU$100,000.




          (c) Intentionally Omitted.




          (d) Intentionally Omitted.




          (e) The Borrowers shall reimburse each Group Lender on demand for any loss (excluding any loss
of the Applicable Margin) incurred or to be incurred by it in the reemployment of the funds
released (i) by any prepayment or conversion (for any reason) of any Eurodollar Loan if such Loan
is repaid other than on its last day of the Interest Period for such Loan or (ii) in the event that
after the Borrowers deliver a notice of Borrowing under Section 2.1(a) or a notice of conversion or
continuation under Section 2.11(a) in respect of Eurodollar Loans, such Loan is not made on the
first day of the Interest Period specified in such notice of Borrowing for any reason other than
(I) a suspension or limitation under Section 2.10(b) of the right of the Borrowers to select a
Eurodollar Loan or (II) a breach by the Group Lenders of their obligation hereunder. Such loss
shall be the amount as reasonably determined by such Group Lender as the excess, if any, of (A) the
amount of interest which would have accrued to such Group Lender on the amount so paid or not
borrowed, continued or converted at a rate of interest equal to the interest rate applicable to
such Loan pursuant to Section 2.7 hereof (but excluding the Applicable Margin) over (B) the amount
realized by such Group Lender in reemploying the funds not advanced or the funds received in
prepayment or realized from the Loan so continued or converted during the period referred to above.
Each Group Lender shall deliver to the Borrowers from time to time one or more certificates
setting forth the amount of such loss (and in reasonable detail the manner of computation thereof)
as determined by such Group Lender, which certificates shall be conclusive absent manifest error.
The Borrowers shall pay the




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Administrative Agent for the account of such Group Lender the amount shown or such certificate
within ten (10) days of the Borrowers’ receipt of such certificate. The Administrative Agent is
authorized (but not obligated) to debit any deposit account of the Borrower now or hereafter
maintained by the Borrower with the Administrative Agent (including without limitation any
Collection Account) to pay any such amount due under this Section 2.12(e) that is not paid when
due.




          (f) In the event the Borrowers fail to prepay any Loan on the date specified in any prepayment
notice delivered pursuant to this Section, the Borrowers on demand by any Group Lender, shall pay
to the Administrative Agent for the account of such Group Lender any amounts required to compensate
such Group Lender for any loss incurred by such Group Lender as a result of such failure to prepay,
including, without limitation, any loss, cost or expenses incurred by reason of the acquisition of
deposits or other funds by such Group Lender to fulfill deposit obligations incurred in
anticipation of such prepayment. Each Group Lender shall deliver to the Borrowers and the
Administrative Agent from time to time one or more certificates setting forth the amount of such
loss (and in reasonable detail the manner of computation thereof) as determined by such Group
Lender, which certificates shall be conclusive absent manifest error. The Administrative Agent is
authorized (but not obligated) to debit any deposit account of the Borrower now or hereafter
maintained by the Borrower with the Administrative Agent (including without limitation any
Collection Account) to pay any such amount due under this Section 2.12(f) that is not paid when
due.




          (g) If at any time the sum of the aggregate principal amount of all U.S. Dollar Loans then
outstanding plus the then current L/C Exposure plus the U.S. Dollar Equivalent of
the aggregate principal amount of all Sterling Loans and Australian Dollar Loans then outstanding,
exceeds the Borrowing Base as set forth on any Borrowing Base Certificate delivered to the
Administrative Agent, the Borrowers shall within ten (10) days after the due date of such Borrowing
Base Certificate prepay outstanding Loans or deposit Cash Equivalents in the Cash Collateral
Accounts to the extent necessary to eliminate such excess. If at any time the sum of the aggregate
principal amount of all U.S. Dollar Loans to the UK Borrower then outstanding plus the U.S. Dollar
Equivalent of the aggregate principal amount of all Sterling Loans then outstanding would exceed
the UK Sublimit, the UK Borrower shall promptly prepay outstanding Loans or deposit Cash
Equivalents in the Cash Collateral Accounts to the extent necessary to eliminate such excess. If
at any time the sum of the aggregate principal amount of all U.S. Dollar Loans to the Australia
Borrower then outstanding plus the U.S. Dollar Equivalent of the aggregate principal amount of all
Australian Dollar Loans then outstanding would exceed the Australia Sublimit, the Australia
Borrower shall promptly prepay outstanding Loans or deposit Cash Equivalents in the Cash Collateral
Accounts to the extent necessary to eliminate such excess.




          (h) Simultaneously with each termination and/or mandatory or optional reduction of the Total
LGEI Commitment pursuant to Section 2.9, the Borrowers shall pay to the Administrative Agent (for
the benefit of the Group Lenders) the amount, if any, by which  the sum of the aggregate
outstanding principal amount of the U.S. Dollar Loans plus the L/C Exposure plus
the unused portion of the Special Production Tranche for all Designated Pictures for which Loans
have been made to LGEI which have not yet been Completed plus the U.S. Dollar Equivalent of
the aggregate outstanding principal amount of the Sterling Loans and




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Australian Dollar Loans exceeds the sum of the reduced Total Commitment plus all
accrued and unpaid interest thereon plus the Commitment Fees on the amount of the Total
Commitment so terminated or reduced through the date thereof. To the extent there is outstanding
L/C Exposure at the time of any optional or mandatory termination of the Total Commitment, the
Borrowers shall deliver to the Administrative Agent Cash Equivalents in an amount equal to the full
amount of the L/C Exposure or furnish other security acceptable to the Required Lenders.




          (i) If on any day on which the Loans would otherwise be required to be prepaid but for the
operation of this Section 2.12(i) (each a “Prepayment Date”), the amount of such required
prepayment exceeds the then outstanding aggregate principal amount of U.S. Dollar Loans that
constitute Alternate Base Rate Loans, and no Default or Event of Default is then continuing, then
on such Prepayment Date the Borrowers may, at their option, deposit U.S. Dollars with the
Administrative Agent or into the Cash Collateral Account, as appropriate, in an amount equal to
such excess. If the Borrowers make such deposit then (i) only the outstanding Alternate Base Rate
Loans shall be required to be prepaid on such Prepayment Date and (ii) on the last day of each
Interest Period with respect to any Eurodollar Loan, in effect after such Prepayment Date, the
Administrative Agent is irrevocably authorized and directed to apply such Sterling funds or
Australian Dollar funds so deposited with the Administrative Agent or funds from Cash Collateral
Account, if any, (and liquidate investments held in such cash collateral account as necessary), as
appropriate, to prepay Eurodollar Loans for which the Interest Period is then ending until the
aggregate of such prepayments equals the prepayment which would have been required on such
Prepayment Date but for the operation of this Section 2.12(i).




          (j) Unless otherwise designated in writing by the Borrowers, all prepayments shall be applied
to the applicable principal payment set forth in this Section 2.12, first to that amount of such
applicable principal payment then maintained as Alternate Base Rate Loans, and then to that amount
of such applicable principal payment maintained as Eurodollar Loans in order of the scheduled
expiry of Interest Periods with respect thereto.




     SECTION 2.13 Change in Circumstances.



          (a) In the event that after the Closing Date, any change in Applicable Law or in the
interpretation or administration thereof (including, without limitation, any request, guideline or
policy not having the force of law) by any Governmental Authority charged with the administration
or interpretation thereof or, with respect to clauses (ii), (iii) or (iv) below any changes in
conditions, shall occur which shall:




               (i) subject any LGEI Lender, Australia Lender or UK Lender to, or increase the net amount of,
any tax, levy, impost, duty, charge, fee, deduction or withholding with respect to any Eurodollar
Loan (other than withholding tax imposed by the United States of America or any political
subdivision or taxing authority thereof or therein or any other tax, levy, impost, duty, charge,
fee, deduction or withholding (x) that is measured with respect to the overall net income of such
Group Lender or of a Lending Office of such Group Lender, and that is imposed by the United States
of America or by the jurisdiction in which such Group Lender or Lending Office is incorporated or
carries on business, in which such Lending Office is located, managed or controlled or in which
such Group Lender has its principal office or a presence not otherwise connected with, or required
by, this transaction (or any political subdivision or taxing



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authority thereof or therein), or (y) that is imposed solely by reason of any Group Lender
failing to make a declaration of, or otherwise to establish, nonresidence, or to make any other
claim for exemption, or otherwise to comply with any certification, identification, information,
documentation or reporting requirements prescribed under the laws of the relevant jurisdiction, in
those cases where a Group Lender may properly make such declaration or claim or so establish
nonresidence or otherwise comply); or



               (ii) change the basis of taxation of any payment to any LGEI Lender, Australia Lender or UK
Lender of principal of or interest on any Eurodollar Loan or other fees and amounts payable to any
Group Lender hereunder, or any combination of the foregoing, other than withholding tax imposed by
the United States of America as applicable, or any political subdivision or taxing authority
thereof or therein or any other tax, levy, impost, duty, charge, fee, deduction or withholding that
is measured with respect to the overall net income of such Group Lender or of a Lending Office of
such Group Lender, and that is imposed by the United States of America or by the jurisdiction in
which such Group Lender or Lending Office is incorporated or carries on business, in which such
Lending Office is located, managed or controlled or in which such Group Lender has its principal
office or a presence not otherwise connected with, or required by, this transaction (or any
political subdivision or taxing authority thereof or therein); or



               (iii) impose, modify or deem applicable any reserve, deposit or similar requirement against
any assets held by, deposits with or for the account of, or loans or commitments by, an office of
such Group Lender with respect to any Eurodollar Loan; or



               (iv) impose upon such Group Lender or the London Interbank Market any other condition with
respect to the Eurodollar Loans or this Credit Agreement;


and the result of any of the foregoing shall be to increase the actual cost to such Group Lender of
making or maintaining any Eurodollar Loan hereunder or to reduce the amount of any payment (whether
of principal, interest or otherwise) received or receivable by such Group Lender in connection with
any Eurodollar Loan hereunder, or to require such Group Lender to make any payment in connection
with any Eurodollar Loan hereunder, in each case by or in an amount which such Group Lender in its
sole judgment shall deem material, then and in each case, the Borrowers agree to pay to the
Administrative Agent for the account of such Group Lender, as provided in paragraph (c) below, such
amounts as shall be necessary to compensate such Group Lender for such cost, reduction or payment.




          (b) If at any time and from time to time after the Initial Date, any Group Lender shall have
determined that the applicability of any law, rule, regulation or guideline regarding capital
adequacy which is adopted after the Initial Date, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration thereof, or the
compliance by any Group Lender (or any Lending Office of such Group Lender) or any Group Lender’s
holding company with any request or directive issued after the Initial Date regarding capital
adequacy (whether or not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such Group Lender’s capital
or on the capital of such Group Lender’s holding company, if any,




- 56 -









 







as a consequence of this Credit Agreement or the Loans made or Letters of Credit issued or
participated in by such Group Lender pursuant hereto to a level below that which such Group Lender
or such Group Lender’s holding company could have achieved but for such applicability, adoption,
change or compliance (taking into consideration such Group Lender’s policies and the policies of
such Group Lender’s holding company with respect to capital adequacy) by an amount deemed by such
Group Lender to be material, then from time to time the Borrowers agree to pay to the
Administrative Agent for the account of such Group Lender, as provided in paragraph (c) below, such
additional amount or amounts as will compensate such Group Lender or such Group Lender’s holding
company for any such reduction suffered to the extent attributable to this Credit Agreement or the
Loans made or Letters of Credit issued or participated in pursuant hereto.




          (c) Each LGEI Lender, Australia Lender and UK Lender shall deliver to LGEI and to the
Administrative Agent from time to time one or more certificates setting forth the amounts due to
such Group Lender under paragraphs (a) or (b) above, the changes as a result of which such amounts
are due and the manner of computing such amounts. Each such certificate shall be conclusive in the
absence of manifest error. The Borrowers shall pay to the Administrative Agent for the account of
each such Group Lender the amounts shown as due on any such certificate within ten (10) business
days after the Borrowers’ receipt of the same. No failure on the part of any Group Lender to
demand compensation under paragraph (a) or (b) above on any one occasion shall constitute a waiver
of its right to demand such compensation on any other occasion. The protection of this
Section 2.13 shall be available to each Group Lender regardless of any possible contention of the
invalidity or inapplicability of any law, regulation or other condition which shall give rise to
any demand by such Group Lender for compensation hereunder.




          (d) Each Group Lender agrees that after it becomes aware of the occurrence of an event or the
existence of a condition that (i) would cause it to incur any increased cost hereunder or render it
unable to perform its agreements hereunder for the reasons specifically set forth in Section
2.6(i), Section 2.10(b), this Section 2.13 or Section 2.18 or (ii) would require the Borrowers to
pay an increased amount under Section 2.6(i), Section 2.10(b), this Section 2.13 or Section 2.18,
to the extent not inconsistent with such Group Lender’s internal policies it will use reasonable
efforts to make, fund or maintain the affected Loans of such Group Lender, or, if applicable, to
participate in Letters of Credit as required by Section 2.6 through another Lending Office of such
Group Lender if as a result thereof the additional monies which would otherwise be required to be
paid or the reduction of amounts receivable by such Group Lender thereunder in respect of such
Loans, Letters of Credit or participations therein would be materially reduced, or such inability
to perform would cease to exist, or the increased costs which would otherwise be required to be
paid in respect of such Loans, Letters of Credit or participations therein pursuant to Section
2.6(i), Section 2.10(b), this Section 2.13 or Section 2.18 would be materially reduced or the taxes
or other amounts otherwise payable under Section 2.6(i), Section 2.10(b), this Section 2.13 or
Section 2.18 would be materially reduced, and if, as determined by such Group Lender, in its sole
discretion, the making, funding or maintaining of such Loans, Letters of Credit or participations
therein through such other Lending Office would not otherwise materially adversely affect such
Loans, Letters of Credit or participations therein or such Group Lender.




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          (e) Each Group Lender will use reasonable efforts to notify the Borrowers, through the
Administrative Agent, of any event of which it has knowledge that will entitle such Group Lender to
compensation pursuant to subsections 2.6(i), 2.10(b), this Section 2.13 or Section 2.18. No
failure by any Group Lender to give (or delay in giving) such notice shall adversely affect such
Group Lender’s rights to such compensation.




          (f) If the Borrowers shall receive notice from any Group Lender that amounts are due to such
Group Lender pursuant to paragraph (c) hereof or that any of the events designated in paragraph (d)
hereof have occurred, the Borrowers may (but subject in any such case to the payments required by
Sections 2.12(b) and 2.14), upon at least five Business Days’ prior written or telecopier notice to
such Group Lender and the Administrative Agent, but not more than 60 days after receipt of written
notice from such Group Lender, identify to the Administrative Agent a lending institution
acceptable to the Borrowers and the Administrative Agent, which will purchase the Commitments, the
amount of outstanding Loans and any participations in Letters of Credit from the Group Lender
providing such notice, and such Group Lender shall thereupon assign its Commitment, any Loans owing
to such Group Lender, any participations in Letters of Credit and the Notes held by such Group
Lender to such replacement lending institution pursuant to Section 13.3.




     SECTION 2.14 Change in Legality.



          (a) Notwithstanding anything to the contrary contained elsewhere in this Credit Agreement, if
any change after the date hereof in Applicable Law, guideline or order, or in the interpretation
thereof by any Governmental Authority charged with the administration thereof, shall make it
unlawful for any Group Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to a Eurodollar Loan, then, by written notice to
the Borrowers and the Administrative Agent such Group Lender may (i) declare that Eurodollar Loans
will not thereafter be made by such Group Lender hereunder and/or (ii) require that, subject to
Section 2.11, all outstanding Eurodollar Loans made by it be converted to Alternate Base Rate Loans
whereupon all of such Eurodollar Loans shall automatically be converted to Alternate Base Rate
Loans as of the effective date of such notice as provided in paragraph (b) below. Such Group
Lender’s Pro Rata Share of any subsequent Eurodollar Loan shall, instead, be an Alternate Base Rate
Loan unless such declaration is subsequently withdrawn.




          (b) A notice to the Borrowers by any Group Lender pursuant to paragraph (a) above shall be
effective for purposes of clause (ii) thereof, if lawful, on the last day of the current Interest
Period for each outstanding Eurodollar Loan; and in all other cases, on the date of receipt of such
notice by the Borrowers.




     SECTION 2.15 United States Withholding.



          (a) Prior to the date of the initial Loans hereunder, and prior to the effective date set
forth in the Assignment and Acceptance with respect to any LGEI Lender becoming a LGEI Lender after
the date hereof, and from time to time thereafter if requested by LGEI or the Administrative Agent
or required because, as a result of a change in law or a change in circumstances or otherwise, a
previously delivered form or statement becomes incomplete or




- 58 -









 







incorrect in any material respect, each LGEI Lender organized under the laws of a jurisdiction
outside the United States shall provide, if applicable, the Administrative Agent and LGEI with
complete, accurate and duly executed forms or other statements prescribed by the Internal Revenue
Service of the United States certifying such Group Lender’s exemption from, or entitlement to a
reduced rate of, United States withholding taxes (including backup withholding taxes) with respect
to all payments to be made to such Group Lender hereunder and under any other Fundamental Document.




          (b) LGEI and the Administrative Agent shall be entitled to deduct and withhold any and all
present or future taxes or withholdings, and all liabilities with respect thereto, from payments to
a LGEI Lender hereunder or under any other Fundamental Document, if and to the extent that LGEI or
the Administrative Agent in good faith determines that such deduction or withholding is required by
the law of the United States, including, without limitation, any applicable treaty of the United
States. In the event LGEI or the Administrative Agent shall so determine that deduction or
withholding of taxes is required, they shall advise the affected LGEI Lender as to the basis of
such determination prior to actually deducting and withholding such taxes. In the event LGEI or
the Administrative Agent shall so deduct or withhold taxes from amounts payable hereunder, they (i)
shall pay to, or deposit with, the appropriate taxing authority in a timely manner the full amount
of taxes it has deducted or withheld; (ii) shall provide to each LGEI Lender from whom taxes were
deducted or withheld, evidence of payment of such taxes to, or the deposit thereof with, the
appropriate taxing authority and a statement setting forth the amount of taxes deducted or
withheld, the applicable rate, and any other information or documentation reasonably requested by
such Group Lender; and (iii) shall forward to each such Group Lender any official tax receipts or
other documentation with respect to the payment or deposit of the deducted or withheld taxes as may
be issued from time to time by the appropriate taxing authority. Unless LGEI and the
Administrative Agent have received forms or other documents satisfactory to them indicating that
payments hereunder or under any Note are not subject to United States withholding tax or are
subject to such tax at a rate reduced by an applicable tax treaty, the Borrowers or the
Administrative Agent may withhold taxes from such payments at the applicable statutory rate in the
case of payments to or for any Group Lender organized under the laws of a jurisdiction outside the
United States.




          (c) Each LGEI Lender agrees (i) that as between it and LGEI or the Administrative Agent, such
Group Lender shall be the Person to deduct and withhold taxes, and to the extent required by law,
it shall deduct and withhold taxes on amounts that such Group Lender may remit to any other
Person(s) by reason of any undisclosed transfer or assignment of an interest in this Credit
Agreement to such other Person(s) pursuant to Section 13.3; and (ii) to indemnify LGEI and the
Administrative Agent and any officers, directors, agents, employees or representatives of the
Borrowers or the Administrative Agent against, and to hold them harmless from, any tax, interest,
additions to tax, penalties, reasonable counsel and accountants’ fees, disbursements or payments
arising from the assertion by any appropriate taxing authority of any claim against them relating
to a failure to withhold taxes as required by law with respect to amounts described in clause (i)
of this paragraph (c) or arising from the reliance by the Borrowers or the Administrative Agent on
any form or other document furnished by such Group Lender and purporting to establish a basis for
not withholding, or for withholding at a reduced rate, taxes with respect to payments hereunder or
under any other Fundamental Document.




- 59 -









 








          (d) Each assignee of a LGEI Lender’s interest in this Credit Agreement in conformity with
Section 13.3 shall be bound by this Section 2.15, so that such assignee will have all of the
obligations and provide all of the forms and statements and all indemnities, representations and
warranties required to be given under this Section 2.15.




          (e) Notwithstanding the foregoing, in the event that any withholding taxes or additional
withholding taxes shall become payable solely as a result of any change in any statute, treaty,
ruling, determination or regulation occurring after the Initial Date in respect of any sum payable
hereunder or under any other Fundamental Document to any Group Lender or the Administrative Agent
(i) the sum payable by LGEI shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section
2.15) such Group Lender or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) LGEI shall make such
deductions, (iii) LGEI shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with Applicable Law and (iv) LGEI shall forward to such Group Lender
or the Administrative Agent (as the case may be) the official tax receipts or other documentation
pursuant to Section 2.15(b). In addition, LGEI shall indemnify each LGEI Lender and the
Administrative Agent for any additional withholding taxes paid by such Group Lender or the
Administrative Agent, as the case may be, or any liability (including penalties and interest)
arising therefrom or with respect thereto, whether or not such additional withholding taxes were
correctly or legally asserted.




          (f) In the event that a LGEI Lender receives a refund of or credit for taxes withheld or paid
pursuant to clause (e) of this Section, which credit or refund is identified by such Group Lender
as being a result of taxes withheld or paid in connection with sums payable hereunder or under any
other Fundamental Document, such Group Lender shall promptly notify the Administrative Agent and
the Borrowers and shall, if no Default or Event of Default has occurred and is continuing, remit to
the Borrowers the amount of such refund or credit allocable to payments made hereunder or under any
other Fundamental Document.




          (g) Each LGEI Lender agrees that after it becomes aware of the occurrence of an event that
would cause the Borrowers to pay any amount pursuant to clause (e) of this Section 2.15, it will
use reasonable efforts to notify LGEI of such event and, to the extent not inconsistent with such
Group Lender’s internal policies, will use its reasonable efforts to make, fund or maintain the
affected U.S. Dollar Loans of such Group Lender, or, if applicable, to participate in Letters of
Credit through another Lending Office of such Group Lender if as a result thereof the additional
monies which would otherwise be required to be paid by reason of Section 2.15(e) in respect of such
Loans, Letters of Credit or participations therein would be materially reduced, and if, as
determined by such Group Lender, in its discretion, the making, funding or maintaining of such
Loans, Letters of Credit or participations therein through such other Lending Office would not
otherwise materially adversely affect such Loans, Letters of Credit or participations therein or
such Group Lender.




          (h) Notwithstanding anything to the contrary herein, each LGEI Lender represents and warrants
that, as of the Closing Date, each such LGEI Lender is entitled to receive any payments under this
Agreement without deduction or withholding of any United States Federal income taxes.





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     SECTION 2.16 Foreign Currency Conversion; Withholding.



          (a) If the net amount of any payment received by the Administrative Agent in respect of the
Sterling Loans hereunder, after such amount has (in the case of an amount received in a currency
other than Sterling and/or received outside the United Kingdom) been converted into Sterling and
transferred to London in accordance with normal banking procedures, is less than the amount
otherwise then due and owing by the UK Borrower to the UK Lender hereunder, or if the
Administrative Agent is unable to immediately convert and transfer any such amount as aforesaid,
then UK Borrower agrees as a separate obligation to the UK Lender to indemnify the UK Lender
against the loss incurred by reason of such shortfall or delay to the extent but only to the extent
such shortfall or delay is due to (i) the application of any exchange controls or similar laws and
regulations or (ii) the fact that such amount was received in a currency other than Sterling; and
if the amount of Sterling thus received by the Administrative Agent, after such conversion, exceeds
the amount otherwise then due and owing, the Administrative Agent shall apply such excess to prepay
any Loans until the UK Borrower Loans shall have been reduced to zero, and thereafter shall remit
any further excess to the UK Borrower.




          (b) If the net amount of any payment received by the Administrative Agent in respect of the
Australia Dollar Loans hereunder, after such amount has (in the case of an amount received in a
currency other than Australian Dollar and/or received outside Australia) been converted into
Australian Dollars and transferred to London in accordance with normal banking procedures, is less
than the amount otherwise then due and owing by the Australia Borrower to the Australia Lender
hereunder, or if the Administrative Agent is unable to immediately convert and transfer any such
amount as aforesaid, then Australia Borrower agrees as a separate obligation to the Australia
Lender to indemnify the Australia Lender against the loss incurred by reason of such shortfall or
delay to the extent but only to the extent such shortfall or delay is due to (i) the application of
any exchange controls or similar laws and regulations or (ii) the fact that such amount was
received in a currency other than Australian Dollar; and if the amount of Australian Dollars thus
received by the Administrative Agent, after such conversion, exceeds the amount otherwise then due
and owing, the Administrative Agent shall apply such excess to prepay any Loans until the Australia
Borrower Loans shall have been reduced to zero, and thereafter shall remit any further excess to
the Australia Borrower.




          (c) If the net amount of any payment received by the Administrative Agent hereunder, after
such amount has (in the case of an amount received in a currency other than U.S. Dollars and/or
received outside of the United States) been converted into U.S. Dollars and transferred to New York
in accordance with normal banking procedures, is less than the amount otherwise then due and owing
by LGEI to the LGEI Lenders hereunder, or if the Administrative Agent is unable to immediately
convert and transfer any such amount as aforesaid, then LGEI agrees as a separate obligation to the
LGEI Lenders to indemnify the LGEI Lenders against the loss incurred by reason of such shortfall or
delay to the extent but only to the extent such shortfall or delay is due to (i) the application of
any exchange controls or similar laws and regulations or (ii) the fact that such amount was
received in a currency other than U.S. Dollars; and if the amount of U.S. Dollars thus received by
the Administrative Agent, after such conversion, exceeds the amount otherwise then due and owing,
the Administrative Agent shall apply such excess to prepay any Loans and provide cash collateral
for Letters of Credit then outstanding until the U.S. Dollar Loans shall have been reduced to zero
and all outstanding




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Letters of Credit have been fully cash collateralized, and thereafter shall remit any further
excess to LGEI.




          (d) If the net amount of any payment received by the Administrative Agent hereunder, after
such amount has (in the case of an amount received in a currency other than U.S. Dollars and/or
received outside of the United States) been converted into U.S. Dollars and transferred to New York
in accordance with normal banking procedures, is less than the amount otherwise then due and owing
by (A) the UK Borrower to the UK Lender on account of U.S. Dollar Loans hereunder or (B) the
Australia Borrower to the Australia Lender on account of U.S. Dollar Loans hereunder, or if the
Administrative Agent is unable to immediately convert and transfer any such amount as aforesaid,
then the UK Borrower and the Australia Borrower each agree as a separate obligation to the UK
Lender and the Australia Lender, respectively, to indemnify such Lenders against the loss incurred
by reason of such shortfall or delay to the extent but only to the extent such shortfall or delay
is due to (i) the application of any exchange controls or similar laws and regulations or (ii) the
fact that such amount was received in a currency other than U.S. Dollars. If, with respect to the
U.S. Dollar Loans to the UK Borrower, the amount of U.S. Dollars thus received by the
Administrative Agent, after such conversion, exceeds the amount otherwise then due and owing, the
Administrative Agent shall apply such excess to prepay any UK Borrower Loans until the UK Borrower
Loans shall have been reduced to zero, and thereafter shall remit any further excess to the UK
Borrower. If, with respect to the U.S. Dollar Loans to the Australia Borrower, the amount of U.S.
Dollars thus received by the Administrative Agent, after such conversion, exceeds the amount
otherwise then due and owing, the Administrative Agent shall apply such excess to prepay any
Australia Borrower Loans until the Australia Borrower Loans shall have been reduced to zero, and
thereafter shall remit any further excess to the Australia Borrower.




          (e) If any amount is withheld or any deduction is made or if under Applicable Law any amount
is required to be withheld or any deduction is required to be made from any payment by or on behalf
of the UK Borrower to the Administrative Agent in connection with the UK Borrower Loans by any
taxing authority or Governmental Authority of any jurisdiction inside or outside the United Kingdom
in connection with any stamp tax, withholding tax, deposit requirement, duty or otherwise imposed
under any Applicable Law, guideline or order in effect in such jurisdiction, or if any UK Lender
becomes liable for any other tax imposed under the Applicable Law of any jurisdiction in connection
with the UK Borrower Loans (other than any tax payable in respect of the income of the UK Lender),
(i) the UK Borrower agrees, as a separate obligation to the UK Lender, that it will pay such
additional amounts as may be necessary so that after making all required withholdings and
deductions (including withholdings and deductions applicable to additional sums payable under this
Section), and after the payment of any required taxes, the UK Lender receives an amount equal to
the sum it would have received had no such amounts been required to be deducted or withheld and no
such taxes required to be paid; (ii) the UK Borrower shall make all such required withholdings and
deductions; (iii) the UK Borrower shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with Applicable Law; and (iv) the UK Borrower
shall forward to the UK Lender or the Administrative Agent (as the case may be) the official tax
receipts or other documentation in respect of the amounts withheld or deducted. In addition, the
UK Borrower shall indemnify the UK Lender and the Administrative Agent for any additional
withholding taxes or deductions paid by such UK Lender or the Administrative Agent,




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as the case may be, or any liability (including penalties and interest) arising therefrom or
with respect thereto, whether or not such additional withholding taxes or deductions were correctly
or legally asserted.




          (f) In the event that the UK Lender receives a refund of or credit for taxes withheld or paid
pursuant to clause (e) of this Section, which credit or refund is identifiable by the UK Lender as
being a result of taxes withheld or paid in connection with sums payable hereunder or under any
other Fundamental Document, the UK Lender shall promptly notify the Administrative Agent and the UK
Borrower and shall remit, if no Event of Default has occurred and is continuing, to the UK Borrower
the amount of such refund or credit allocable to payments made hereunder or under any other
Fundamental Document.




          (g) Notwithstanding anything to the contrary herein, the UK Lender represents and warrants
that, as of the Closing Date, the UK Lender is entitled to receive any payments under this
Agreement without deduction or withholding of any United Kingdom income taxes.




          (h) If any amount is withheld or any deduction is made or if under Applicable Law any amount
is required to be withheld or any deduction is required to be made from any payment by or on behalf
of the Australia Borrower to the Administrative Agent in connection with the Australia Borrower
Loans by any taxing authority or Governmental Authority of any jurisdiction inside or outside
Australia in connection with any stamp tax, withholding tax, deposit requirement, duty or otherwise
imposed under any Applicable Law, guideline or order in effect in such jurisdiction, or if any
Australia Lender becomes liable for any other tax imposed under the Applicable Law of any
jurisdiction in connection with the Australia Borrower Loans (other than any tax payable in respect
of the income of the Australia Lender), (i) the Australia Borrower agrees, as a separate obligation
to the Australia Lender, that it will pay such additional amounts as may be necessary so that after
making all required withholdings and deductions (including withholdings and deductions applicable
to additional sums payable under this Section), and after the payment of any required taxes, the
Australia Lender receives an amount equal to the sum it would have received had no such amounts
been required to be deducted or withheld and no such taxes required to be paid; (ii) the Australia
Borrower shall make all such required withholdings and deductions; (iii) the Australia Borrower
shall pay the full amount withheld or deducted to the relevant taxation authority or other
authority in accordance with Applicable Law; and (iv) the Australia Borrower shall forward to the
Australia Lender or the Administrative Agent (as the case may be) the official tax receipts or
other documentation in respect of the amounts withheld or deducted. In addition, the Australia
Borrower shall indemnify the Australia Lender and the Administrative Agent for any additional
withholding taxes or deductions paid by such Australia Lender or the Administrative Agent, as the
case may be, or any liability (including penalties and interest) arising therefrom or with respect
thereto, whether or not such additional withholding taxes or deductions were correctly or legally
asserted.




          (i) In the event that the Australia Lender receives a refund of or credit for taxes withheld
or paid pursuant to clause (h) of this Section, which credit or refund is identifiable by the
Australia Lender as being a result of taxes withheld or paid in connection with sums payable
hereunder or under any other Fundamental Document, the Australia Lender shall promptly notify the
Administrative Agent and the Australia Borrower and shall remit, if no




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Event of Default has occurred and is continuing, to the Australia Borrower the amount of such
refund or credit allocable to payments made hereunder or under any other Fundamental Document.




          (j) Notwithstanding anything to the contrary herein, the Australia Lender represents and
warrants that, as of the Closing Date, the Australia Lender is entitled to receive any payments
under this Agreement without deduction or withholding of any Australian income taxes.




     SECTION 2.17 Intentionally Omitted.



     SECTION 2.18 Interest Adjustments. If the provisions of this Credit Agreement or any
Note would at any time require payment by the Borrowers to a Group Lender of any amount of interest
in excess of the maximum amount then permitted by Applicable Law with respect to any Loan, the
interest payments to that Group Lender shall be reduced to the extent necessary in order that such
Group Lender shall not receive interest in excess of such maximum amount. If, as a result of the
foregoing, a Group Lender shall receive interest payments hereunder or under a Note in an amount
less than the amount otherwise provided hereunder, such deficit (hereinafter called the
“Interest Deficit”) will, to the fullest extent permitted by Applicable Law, cumulate and
will be carried forward (without interest) until the termination of this Credit Agreement.
Interest otherwise payable to a Group Lender hereunder and under a Note for any subsequent period
shall be increased by the maximum amount of the Interest Deficit that may be so added without
causing such Group Lender to receive interest in excess of the maximum amount then permitted by
Applicable Law with respect to the Loans.



          The amount of any Interest Deficit relating to a Loan and any Note shall be treated as a
prepayment penalty and shall, to the fullest extent permitted by Applicable Law, be paid in full at
the time of any optional prepayment by the Borrowers to the Group Lenders of all the Loans at that
time outstanding pursuant to Section 2.12(a) hereof and a termination of the Commitments under
Section 2.9. The amount of any Interest Deficit relating to a particular Loan and Note at the time
of any complete payment of the Loans at that time outstanding (other than an optional prepayment
thereof pursuant to Section 2.12(a) hereof and a termination of the Commitments under Section 2.9)
shall be canceled and not paid.




     SECTION 2.19 Manner of Payments.



          (a) All payments of principal and interest by LGEI in respect of any U.S. Dollar Loans shall
be pro rata among the LGEI Lenders in accordance with their Percentage. All payments by LGEI
hereunder and under the Notes shall be made without offset or counterclaim in U.S. Dollars, in
immediately available funds, at the office of JPMorgan Chase Bank, N.A. Loan and Agency Services
Group, 10 South Dearborn, Floor 7, Chicago, Illinois 60603, Attention: LaTanya Driver, for credit
to the Clearing Account, no later than 12:00 noon, New York City time, on the date on which such
payment shall be due. Any payment received at such office after such time shall be deemed received
on the following Business Day.




          (b) All payments of principal and interest by the UK Borrower in respect of any Sterling Loans
shall be to the UK Lender. All payments by the UK Borrower hereunder




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shall be made without offset or counterclaim in Sterling in immediately available funds to UK
Lender at its account for Sterling for credit to the Sterling Clearing Account no later than 2:00
p.m. (London time) on the date on which such payment shall be due. Any payment received at such
office after such time shall be deemed received on the following Business Day.




          (c) All payments of principal and interest by the Australia Borrower in respect of any
Australian Dollar Loans shall be to the Australia Lender. All payments by the Australia Borrower
hereunder shall be made without offset or counterclaim in Australian Dollars in immediately
available funds to the Australia Lender at its account for Australian Dollars for credit to the
Australian Dollar Clearing Account no later than 11:00 a.m. (London time), on the date on which
such payment shall be due. Any payment received at such office after such time shall be deemed
received on the following Business Day.




     SECTION 2.20 Provisions Relating to the Borrowing Base.



          (a) The Administrative Agent or the Required Lenders may from time to time by written notice
to the Borrowers (i) delete any Person or Affiliated Group from the schedule of Acceptable Obligors
or (ii) decrease the Allowable Amount for any Acceptable Obligor, in each case, as the
Administrative Agent or the Required Lenders, as the case may be, acting in good faith may deem
appropriate as a result of a change in the circumstances of such Person or Affiliated Group. Any
such notice shall be prospective only, i.e., to the extent that giving effect to such notice would
otherwise result in a mandatory prepayment by the Borrowers under Section 2.12(d), such notice
shall not be given effect for purposes of such mandatory prepayment, but shall nevertheless be
effective for all other purposes under this Credit Agreement immediately upon the Borrowers’
receipt of such notice.




          (b) The Required Lenders may (either independently or after a request has been received from
the Borrowers) from time to time by written notice to the Borrowers add or reinstate a Person or
Affiliated Group to the schedule of Acceptable Obligors or increase the Allowable Amount for any
Acceptable Obligor, as they may in their discretion deem appropriate.




          (c) In the event the Administrative Agent or the Required Lenders notifies the Borrowers that
a Person or Affiliated Group is to be deleted as an Acceptable Obligor in accordance with Section
2.20(a), no additional Eligible Receivables from such Person or Affiliated Group may be included in
the Borrowing Base subsequent to such notice unless the Required Lenders thereafter notify the
Borrowers that such Person or Affiliated Group is reinstated as an Acceptable Obligor in accordance
with Section 2.20(b). In the event the Required Lenders notify the Borrowers that the Allowable
Amount with respect to an Acceptable Obligor is to be reduced in accordance with Section 2.20(a),
no additional Eligible Receivables from such Acceptable Obligor may be included in the Borrowing
Base subsequent to such notice if such inclusion would result in the aggregate amount of Eligible
Receivables from such Acceptable Obligor being in excess of the Allowable Amount for such
Acceptable Obligor after giving effect to such reduction unless the Required Lenders thereafter
notify the Borrowers that the Allowable Amount for such Acceptable Obligor is increased in
accordance with Section 2.20(b); provided, however, that the Allowable Amount for
such Acceptable Obligor shall automatically be restored to its former amount upon request of the
Borrowers if the Administrative Agent is satisfied in good faith that the circumstances which
caused the




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Administrative Agent or the Required Lenders, as the case may be, to reduce such Allowable
Amount are no longer continuing.




     SECTION 2.21 Loans to UK Borrower.



          (a) UK Lender agrees upon the terms and subject to the conditions hereof, to make loans of
Sterling (the “Sterling Loans”) and/or U.S. Dollar Loans to the UK Borrower on any Business
Day and from time to time from the Closing Date to but excluding the Commitment Termination Date,
in a principal amount which when added to the aggregate principal amount of all Sterling Loans and
U.S. Dollar Loans then outstanding to the UK Borrower does not exceed the UK Borrower Commitment.




          (b) Notwithstanding anything to the contrary above, the UK Lender shall not be obligated to
make any Sterling Loan or U.S. Dollar Loan if, as a result thereof, either (A) the sum of the
aggregate principal amount of all U.S. Dollar Loans then outstanding plus the then current
L/C Exposure plus the U.S. Dollar Equivalent of the aggregate principal amount of all
Sterling Loans and Australian Dollar Loans then outstanding plus the unused portion of the
Special Production Tranche for all Designated Pictures which have not yet been Completed would
exceed either (i) the Total Commitment or (ii) the Borrowing Base or (B) the sum of the aggregate
principal amount of all U.S. Dollar Loans to the UK Borrower then outstanding plus the U.S. Dollar
Equivalent of the aggregate principal amount of all Sterling Loans to the UK Borrower then
outstanding would exceed the UK Sublimit.




          (c) Subject to the terms and conditions of this Credit Agreement, at any time prior to the
Commitment Termination Date, UK Borrower may borrow, repay and re-borrow amounts constituting the
UK Borrower Commitments.




          (d) Each U.S. Dollar Loan shall be either an Alternate Base Rate Loan or Eurodollar Loan as UK
Borrower may request. Subject to Section 2.13(d), the UK Lender may at its option fulfill its LGEI
Commitment with respect to any Eurodollar Loan by causing a foreign branch or affiliate to make
such Eurodollar Loan, provided that any exercise of such option shall not affect the obligation of
UK Borrower to repay such Eurodollar Loan in accordance with the terms hereof and of the relevant
Note. Subject to the other provisions of this Section, Sections 2.10(b), 2.13 and 2.14, U.S.
Dollar Loans of more than one Interest Rate Type may be outstanding at the same time.




          (e) Each Sterling Loan shall be a Sterling Eurodollar Loan. Subject to Section 2.13(d), the
UK Lender may at its option fulfill its UK Borrower Commitment with respect to any Eurodollar Loan
by causing a foreign branch or affiliate to make such Sterling Loan, provided that any exercise of
such option shall not affect the obligation of UK Borrower to repay such Sterling Loan in
accordance with the terms hereof and of the relevant Note. Subject to the other provisions of this
Section and Sections 2.10(b), 2.13 and 2.14, Sterling Loans of more than one Interest Rate Type may
be outstanding at the same time. UK Borrower shall give J.P. Morgan Europe Limited (with a copy to
the Administrative Agent) prior written notice of each Eurodollar Loan and shall give the
Administrative Agent prior written notice of each Alternate Base Rate Loan. Each such notice shall
be irrevocable and to be effective, must be received (i) in the case of Sterling Eurodollar Loans
requested by the UK Borrower, by J.P.




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Morgan Europe Limited (with a copy to the Administrative Agent) not later than 11:00 a.m.
(London time) on the third Business Day preceding the date on which such Loan is to be made, (ii)
in the case of Sterling Eurodollar Loans requested by LGEI on behalf of the UK Borrower, by J.P.
Morgan Europe Limited (with a copy to the Administrative Agent) not later than 11:00 a.m. (London
time) on the fourth Business Day preceding the date on which such Loan is to be made, (iii) in the
case of Alternative Base Rate Loans, by the Administrative Agent not later than 2:00 p.m. (New York
City Time) on the Business Day preceding the date on which such Loan is to be made, (iv) in the
case of U.S. Eurodollar Loans requested by the UK Borrower, by J.P. Morgan Europe Limited (with a
copy to the Administrative Agent) not later than 11:00 a.m. (London time) on the third Business Day
preceding the date on which such Loan is to be made and (v) in the case of U.S. Eurodollar Loans
requested by LGEI on behalf of the UK Borrower, by J.P. Morgan Europe Limited (with a copy to the
Administrative Agent) not later than 11:00 a.m. (London time) on the fourth Business Day preceding
the date on which such Loan is to be made. Such notice shall specify (A) the amount of the
requested Sterling Loan or U.S. Dollar Loan, as applicable, (B) the date on which such Sterling
Loan or U.S. Dollar Loan, as applicable, is to be made (which shall be a Business Day), (C) whether
the U.S. Dollar Loan then being requested (if applicable) is to be (or what portion or portions
thereof are to be) an Alternate Base Rate Loan or a Eurodollar Loan and the Interest Period or
Interest Periods with respect thereto in the case of Eurodollar Loans and (D) the Interest Period
or Interest Periods with respect to the Sterling Eurodollar Loan being requested (if applicable).
In the case of a Eurodollar Loan, if no election of an Interest Period is specified in such notice,
such notice shall be deemed a request for an Interest Period of one month.




          (f) If at any time an Event of Default shall occur and be continuing, then each LGEI Lender
shall, immediately upon notice from the Administrative Agent, purchase from the UK Lender an
undivided participation interest in the Sterling Loans and the U.S. Dollar Loans then outstanding
to the UK Borrower in an amount equal to its Pro Rata Share (determined with respect to the LGEI
Commitments) of such Sterling Loans and U.S. Dollar Loans. Upon request, each LGEI Lender shall
promptly transfer to the UK Lender, in immediately available funds, (i) U.S. Dollars in an amount
equal to its participation interest with respect to the U.S. Dollar Loans then outstanding to the
UK Borrower and (ii) Sterling in an amount equal to its participation interest with respect to the
Sterling Loans then outstanding to the UK Borrower. Each Credit Party consents to the foregoing
and agrees, to the extent it may effectively do so under Applicable Law, that any Group Lender
acquiring such participation pursuant to the foregoing may exercise against the applicable Credit
Party rights of setoff and counterclaim with respect to such participation as fully as if such
Group Lender were a direct creditor of such Credit Party in the amount of such participation. Any
Group Lender acquiring a participation pursuant to the foregoing shall be entitled to the cost
protection and indemnity protections available to the UK Lender with respect to the Sterling Loans
to the extent of such participation.




          (g) Notwithstanding any provision to the contrary in this Credit Agreement, UK Borrower shall
not, in any notice of borrowing under this Section 2.21 request any Eurodollar Loan which, if made,
would result in an aggregate of more than five (5) separate Eurodollar Loans being outstanding
hereunder at any one time. For purposes of the foregoing, Eurodollar Loans having Interest Periods
commencing or ending on different days shall be considered separate Eurodollar Loans.




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          (h) The aggregate amount of any Borrowing under the UK Borrower Facility consisting of
Eurodollar Loans shall be in a minimum aggregate principal amount of £500,000 or such greater
amount which is an integral multiple of £100,000 (or such lesser amount as shall equal the
available but unused portion of the UK Borrower Commitment then in effect).




     SECTION 2.22 Loans to Australia Borrower.



          (a) Australia Lender agrees upon the terms and subject to the conditions hereof, to make loans
of Australian Dollars (the “Australian Dollar Loans”) and/or U.S. Dollar Loans to the
Australia Borrower on any Business Day and from time to time from the Closing Date to but excluding
the Commitment Termination Date, in a principal amount which when added to the aggregate principal
amount of all Australian Dollar Loans and U.S. Dollar Loans then outstanding to the Australia
Borrower does not exceed the Australia Borrower Commitment.




          (b) Notwithstanding anything to the contrary above, the Australia Lender shall not be
obligated to make any Australian Dollar Loan or U.S. Dollar Loan if, as a result thereof, either
(A) the sum of the aggregate principal amount of all U.S. Dollar Loans then outstanding
plus the then current L/C Exposure plus the U.S. Dollar Equivalent of the aggregate
principal amount of all Sterling Loans and Australian Dollar Loans then outstanding plus
the unused portion of the Special Production Tranche for all Designated Pictures which have not yet
been Completed would exceed either (i) the Total Commitment or (ii) the Borrowing Base or (B) the
sum of the aggregate principal amount of all U.S. Dollar Loans to the Australia Borrower then
outstanding plus the U.S. Dollar Equivalent of the aggregate principal amount of all Australian
Dollar Loans to the Australia Borrower then outstanding would exceed the Australia Sublimit.




          (c) Subject to the terms and conditions of this Credit Agreement, at any time prior to the
Commitment Termination Date, Australia Borrower may borrow, repay and re-borrow amounts
constituting the Australia Borrower Commitments.




          (d) Each U.S. Dollar Loan shall be either an Alternate Base Rate Loan or Eurodollar Loan as
Australia Borrower may request. Subject to Section 2.13(d), the Australia Lender may at its option
fulfill its LGEI Commitment with respect to any Eurodollar Loan by causing a foreign branch or
affiliate to make such Eurodollar Loan, provided that any exercise of such option shall not affect
the obligation of Australia Borrower to repay such Eurodollar Loan in accordance with the terms
hereof and of the relevant Note. Subject to the other provisions of this Section and Sections
2.10(b), 2.13 and 2.14, U.S. Dollar Loans of more than one Interest Rate Type may be outstanding at
the same time.




          (e) Each Australian Dollar Loan shall be an Australian Dollar Eurodollar Loan. Subject to
Section 2.13(d), the Australia Lender may at its option fulfill its Australia Borrower Commitment
with respect to any Eurodollar Loan by causing a foreign branch or affiliate to make such
Australian Dollar Loan, provided that any exercise of such option shall not affect the obligation
of Australia Borrower to repay such Australian Dollar Loan in accordance with the terms hereof and
of the relevant Note. Subject to the other provisions of this Section and Sections 2.10(b), 2.13
and Section 2.14, Australian Dollar Loans of more than one Interest Rate Type may be outstanding at
the same time. Australia Borrower shall give J.P. Morgan




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Europe Limited (with a copy to the Administrative Agent) prior written notice of each
Eurodollar Loan and shall give the Administrative Agent prior written notice of each Alternate Base
Rate Loan. Each such notice shall be irrevocable and to be effective, must be received (i) in the
case of Australian Dollar Eurodollar Loans requested by the Australia Borrower, by J.P. Morgan
Europe Limited (with a copy to the Administrative Agent) not later than 11:00 a.m. (London time) on
the third Business Day preceding the date on which such Loan is to be made, (ii) in the case of
Australian Dollar Eurodollar Loans requested by LGEI on behalf of the Australia Borrower, by J.P.
Morgan Europe Limited (with a copy to the Administrative Agent) not later than 11:00 a.m. (London
time) on the fourth Business Day preceding the date on which such Loan is to be made, (iii) in the
case of Alternative Base Rate Loans, by the Administrative Agent not later than 2:00 p.m. (New York
City Time) on the Business Day preceding the date on which such Loan is to be made, (iv) in the
case of U.S. Eurodollar Loans requested by the Australia Borrower, by J.P. Morgan Europe Limited
(with a copy to the Administrative Agent) not later than 11:00 a.m. (London time) on the third
Business Day preceding the date on which such Loan is to be made and (v) in the case of U.S.
Eurodollar Loans requested by LGEI on behalf of the Australia Borrower, by J.P. Morgan Europe
Limited (with a copy to the Administrative Agent) not later than 11:00 a.m. (London time) on the
fourth Business Day preceding the date on which such Loan is to be made. Such notice shall specify
(A) the amount of the requested Australian Dollar Loan or U.S. Dollar Loan, as applicable, (B) the
date on which such Australian Dollar Loan or U.S. Dollar Loan, as applicable, is to be made (which
shall be a Business Day), (C) whether the U.S. Dollar Loan then being requested (if applicable) is
to be (or what portion or portions thereof are to be) an Alternate Base Rate Loan or a Eurodollar
Loan and the Interest Period or Interest Periods with respect thereto in the case of Eurodollar
Loans and (D) the Interest Period or Interest Periods with respect to the Australian Dollar
Eurodollar Loan being requested (if applicable). In the case of a Eurodollar Loan, if no election
of an Interest Period is specified in such notice, such notice shall be deemed a request for an
Interest Period of one month.




          (f) If at any time an Event of Default shall occur and be continuing, then each LGEI Lender
shall, immediately upon notice from the Administrative Agent, purchase from the Australia Lender an
undivided participation interest in the Australian Dollar Loans and the U.S. Dollar Loans then
outstanding to the Australia Borrower in an amount equal to its Pro Rata Share (determined with
respect to the LGEI Commitments) of such Australian Dollar Loans and U.S. Dollar Loans. Upon
request, each LGEI Lender shall promptly transfer to the Australia Lender, in immediately available
funds, (i) U.S. Dollars in an amount equal to its participation interest with respect to the U.S.
Dollar Loans then outstanding to the Australia Borrower and (ii) Australian Dollars in an amount
equal to its participation interest with respect to the Australian Dollar Loans then outstanding to
the Australia Borrower. Each Credit Party consents to the foregoing and agrees, to the extent it
may effectively do so under Applicable Law, that any Group Lender acquiring such participation
pursuant to the foregoing may exercise against the applicable Credit Party rights of setoff and
counterclaim with respect to such participation as fully as if such Group Lender were a direct
creditor of such Credit Party in the amount of such participation. Any Group Lender acquiring a
participation pursuant to the foregoing shall be entitled to the cost protection and indemnity
protections available to the Australia Lender with respect to the Australian Dollar Loans to the
extent of such participation.




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          (g) Notwithstanding any provision to the contrary in this Credit Agreement, Australia Borrower
shall not, in any notice of borrowing under this Section 2.22 request any Eurodollar Loan which, if
made, would result in an aggregate of more than five (5) separate Eurodollar Loans being
outstanding hereunder at any one time. For purposes of the foregoing, Eurodollar Loans having
Interest Periods commencing or ending on different days shall be considered separate Eurodollar
Loans.




          (h) The aggregate amount of any Borrowing under the Australia Borrower Facility consisting of
Eurodollar Loans shall be in a minimum aggregate principal amount of AU$500,000 or such greater
amount which is an integral multiple of AU$100,000 (or such lesser amount as shall equal the
available but unused portion of the Australia Borrower Commitment then in effect).




          SECTION 2.23 Increase in Total Commitment.




          (a) The Borrowers may, by written notice to the Administrative Agent from time to time after
the Closing Date, request that the Total Commitment be increased by up to U.S.$160,000,000 in the
aggregate (any such increase in the Total Commitment shall be referred to as an “Incremental
Facility”); provided that (i) the Loans under the Incremental Facility shall rank pari passu or
junior in right of payment and security with the Loans made pursuant to the Total Commitment as in
effect immediately prior to any such increase, (ii) the Loans under the Incremental Facility shall
for all purposes be Loans borrowed pursuant to the terms of this Credit Agreement, (iii) the
financial institutions providing for such Incremental Facility shall be satisfactory to the
Administrative Agent and the Borrowers, (iv) the Administrative Agent shall be satisfied that all
Obligations as so increased will be “Senior Debt” as defined in the documentation governing
all Subordinated Debt, (v) the Total Commitment after such increase does not exceed
U.S.$500,000,000 and (vi) no Default or Event of Default shall have occurred and be continuing or
will exist after giving effect to such Incremental Facility. The aggregate amount of any
Incremental Facility shall be in a minimum amount of U.S.$10,000,000 (and in integral multiples of
U.S.$5,000,000 in excess thereof). To achieve the full amount of a requested increase, the
Borrowers may solicit increased commitments from existing Lenders and also invite additional
financial institutions to become Lenders; provided, however, that no existing
Lender shall be obligated and/or required to increase its Commitment pursuant to this Section 2.23
unless it specifically consents in writing to provide such increase.




          (b) If the Commitments are increased in accordance with this Section 2.23, the Administrative
Agent shall determine the effective date (the “Increase Effective Date”) and the final
allocation of such increase. The Administrative Agent shall promptly notify the Borrowers and the
Lenders of the final allocation of such increase and the Increase Effective Date. As a condition
precedent to such increase, in addition to any deliveries pursuant to Section 2.23(a) above, the
Borrower shall deliver to the Administrative Agent each of the following in form and substance
satisfactory to the Administrative Agent: (1) a certificate of each Credit Party dated as of the
Increase Effective Date (which may be an omnibus certificate for all Credit Parties) signed by an
Authorized Officer of such Credit Party (i) certifying and attaching the resolutions adopted by
such Credit Party approving or consenting to such increase (which may be an omnibus resolution for
all Credit Parties), and (ii) in the case of the Borrowers, certifying that, before and after
giving effect to such increase, (A) the representations and warranties




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contained in Article III hereof and the other Fundamental Documents are true and correct on
and as of the Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true and correct as of
such earlier date, and except that for purposes of this Section 2.23, the representations and
warranties contained in Section 3.5 shall be deemed to refer to the most recent statements
furnished pursuant to Section 5.1 hereof, and (B) no Default or Event of Default exists or is
continuing and (2) a statement of reaffirmation from each Credit Party pursuant to which each such
Credit Party ratifies this Credit Agreement and the other Fundamental Documents and acknowledges
and reaffirms that, after giving effect to such increase, it is bound by all terms of this Credit
Agreement and the other Fundamental Documents.




          (c) Each Incremental Facility shall be effected by a joinder agreement (the “Increase
Joinder”) executed by the Borrowers, the Administrative Agents and each Lender providing such
Incremental Facility, in form and substance satisfactory to each of them. The Increase Joinder
shall specify (i) whether such Incremental Facility is to consist of revolving Loans or term Loans,
(ii) the Borrower for such Incremental Facility (which may be a Credit Party which was not
previously a Borrower under the Credit Agreement), (iii) the Applicable Margins for such
Incremental Facility, (iv) the currency or currencies in which Loans under the Incremental Facility
may be made, and (v) if such Incremental Facility is to consist of term Loans, any scheduled
amortization with respect to such Incremental Facility (provided that aggregate scheduled
amortization prior to the Maturity Date shall not exceed 5% of the total amount of such Incremental
Facility). Except as set forth in the applicable Increase Joinder, all Loans under each
Incremental Facility shall be the same as the other Loans under the Credit Agreement. If the
Applicable Margins for any Incremental Facility are higher than the Applicable Margins then in
effect under the Credit Agreement for other Loans, the Applicable Margins for all other Loans shall
automatically be adjusted upwards as of the Increase Effective Date to equal the Applicable Margins
of such Incremental Facility. The Increase Joinder may, without the consent of any other Lenders,
effect such amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section
2.23.




          (d) The Administrative Agent may require (i) the Borrowers to prepay any Loans outstanding on
the Increase Effective Date on a non-pro rata basis (and pay any additional amounts required
pursuant to Section 2.12) and (ii) the Lenders providing any Incremental Facility in addition to
their initial Loans on a non-pro rata basis to take (or require the other parties hereto to take)
such other actions as it may deem reasonably appropriate in order to keep the outstanding Loans
ratable among the Lenders of each tranche based on their respective Commitments after giving effect
to any new or increased Commitments pursuant to the terms of this Section 2.23.




3. REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES




          In order to induce the Administrative Agent, the Issuing Bank and the Group Lenders to enter
into this Credit Agreement and to make the Loans and issue or purchase participations in the
Letters of Credit provided for herein, the Credit Parties, jointly and




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severally, make the following representations and warranties to, and agreements with, the
Administrative Agent, the Issuing Bank and the Group Lenders, all of which shall survive the
execution and delivery of this Credit Agreement, the issuance of the Notes, the making of the
Loans, and the issuance of the Letters of Credit:




     SECTION 3.1 Existence and Power. (a) Each of the Credit Parties is a corporation,
limited liability company or partnership duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and is qualified to do business and in good
standing in all jurisdictions where (i) the nature of its properties or business so requires and
(ii) the failure to be in good standing would render any Eligible Receivable unenforceable or would
give rise to a material liability of such Credit Party (a list of such jurisdictions as of the date
hereof is attached hereto as Schedule 3.1(a)).



          (b) Each of the Credit Parties has the power and authority (i) to own its respective
properties and carry on its respective business as now being conducted, (ii) to execute, deliver
and perform, as applicable, its obligations under the Fundamental Documents and any other documents
contemplated thereby to which it is or will be a party, (iii) in the case of the Borrowers, to
borrow hereunder, and (iv) to grant to the Administrative Agent, for the benefit of itself, the
Issuing Bank and the Group Lenders, a security interest in the Collateral including the Pledged
Securities, as contemplated by this Credit Agreement and the other Fundamental Documents to which
it is or will be a party; and in the case of the Guarantors, to guarantee the Obligations as
contemplated by Article 9 hereof.




     SECTION 3.2 Authority and No Violation. (a) The execution, delivery and performance
of this Credit Agreement and the other Fundamental Documents to which it is a party, by each Credit
Party, the grant to the Administrative Agent for the benefit of the Administrative Agent, the
Issuing Bank and the Group Lenders of the security interest in the Collateral and the Pledged
Securities as contemplated herein and by the other Fundamental Documents and, in the case of the
Borrowers, the Borrowings hereunder and the execution, delivery and performance of the Notes and,
in the case of each Guarantor, the guaranty of the Obligations as contemplated in Article 9 hereof,
(i) have been duly authorized by all necessary corporate or company (as applicable) action on the
part of each such Credit Party, (ii) will not constitute a violation of any provision of Applicable
Law in any material respect or any order of any Governmental Authority applicable to such Credit
Party, or any of its properties or assets in any material respect, (iii) will not violate any
provision of the Certificate of Incorporation, By-Laws, limited liability company agreement or any
other organizational document of any Credit Party, (iv) will not violate any provision of any
Distribution Agreement, indenture, agreement, bond, note or other similar instrument to which such
Credit Party is a party or by which such Credit Party or any of its properties or assets are bound
in any material respect, (v) will not be in conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a material default under, or create any right to
terminate, any such Distribution Agreement, indenture, agreement, bond, note or other instrument,
and (vi) will not result in the creation or imposition of any Lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of any of the Credit Parties other than
pursuant to this Credit Agreement or the other Fundamental Documents.



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          (b) There are no restrictions on the transfer of any of the Pledged Securities other than as a
result of this Credit Agreement or applicable securities laws and the regulations promulgated
thereunder.




     SECTION 3.3 Governmental Approval. All material authorizations, approvals,
registrations or filings from or with any Governmental Authority (other than UCC-1 and PPSA
financing statements, the Hypothec, the Copyright Security Agreement and the Trademark Security
Agreement which will be delivered to the Administrative Agent on or prior to the Closing Date, in
form suitable for recording or filing with the appropriate filing office) required for the
execution, delivery and performance by any Credit Party of this Credit Agreement and the other
Fundamental Documents to which it is a party, and the execution and delivery by the Borrowers of
the Notes, have been duly obtained or made, and are in full force and effect, and if any further
authorizations, approvals, registrations or filings should hereafter become necessary, the Credit
Parties shall obtain or make all such authorizations, approvals, registrations or filings.



     SECTION 3.4 Binding Agreements. This Credit Agreement and the other Fundamental
Documents when executed, will constitute the legal, valid and binding obligations of each Credit
Party that is a party thereto, enforceable against such Credit Party in accordance with their
respective terms, subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency,
reorganization and similar laws affecting creditors’ rights generally and to general principles of
equity.



     SECTION 3.5 Financial Statements. The audited consolidated balance sheets of LGEC
and its Consolidated Subsidiaries at March 31, 2007 and March 31, 2008, together with the related
statements of income and the related notes and supplemental information for the fiscal years then
ended, have been prepared in accordance with GAAP in effect as of such date consistently applied,
except as otherwise indicated in the notes to such financial statements. All of such financial
statements fairly present the financial position or the results of operations of LGEC and its
Consolidated Subsidiaries on a consolidated basis at the dates or for the periods indicated and
reflect all known liabilities, contingent or otherwise, that GAAP require, as of such dates, to be
shown or reserved against.



     SECTION 3.6 No Material Adverse Change. (a) There has been no material adverse
change with respect to the business, operations, performance, assets, properties, condition
(financial or otherwise) or prospects of the Credit Parties taken as a whole from March 31, 2008.



          (b) No Credit Party has entered or is entering into the arrangements contemplated hereby and
by the other Fundamental Documents, or intends to make any transfer or incur any obligations
hereunder or thereunder, with actual intent to hinder, delay or defraud either present or future
creditors. On and as of the Closing Date, on a pro forma basis after giving effect to all
Indebtedness (including the Loans) expected to be borrowed or repaid on the Closing Date (i) each
Credit Party expects the cash available to such Credit Party, after taking into account all other
anticipated uses of the cash of such Credit Party (including the payments on or in respect of debt
referred to in clause (iii) of this Section 3.6(b)), will be sufficient to satisfy all final
judgments for money damages which have been docketed against such Credit




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Party or which may be rendered against such Credit Party in any action in which such Credit
Party is a defendant (taking into account the reasonably anticipated maximum amount of any such
judgment and the earliest time at which such judgment might be entered); (ii) the sum of the
present fair saleable value of the assets of each Credit Party will exceed the probable liability
of such Credit Party on its debts (including its Guaranties); (iii) no Credit Party will have
incurred or intends to, or believes that it will, incur debts beyond its ability to pay such debts
as such debts mature (taking into account the timing and amounts of cash to be received by such
Credit Party from any source, and of amounts to be payable on or in respect of debts of such Credit
Party and the amounts referred to in clause (i)); and (iv) each Credit Party believes it will have
sufficient capital with which to conduct its present and proposed business and the property of such
Credit Party does not constitute unreasonably small capital with which to conduct its present or
proposed business. For purposes of this Section 3.6, “debt” means any liability or a
claim, and “claim” means (y) right to payment whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (z) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured.




     SECTION 3.7 Ownership of Pledged Securities, Subsidiaries, etc. (a) annexed hereto as
Schedule 3.7(a) is a correct and complete list as of the date hereof, of each Credit Party showing,
as to each, (i) its name, (ii) the jurisdiction in which it was incorporated or otherwise
organized, (iii) in the case of each Credit Party which is a corporation, its authorized
capitalization, the number of shares of its capital stock outstanding and (except in the case of
LGEC) the ownership of its capital stock and (iv) in the case of each Credit Party which is a
limited liability company, the ownership of its membership interests.



          (b) Except as noted on Schedule 3.7(b)(i), as of the date hereof no Credit Party holds any
Equity Interest or other Investment, either directly or indirectly, in any Person other than
another Credit Party, an Unrestricted Subsidiary or an Inactive Subsidiary and no Credit Party is a
general or limited partner in any joint venture or partnership. Annexed hereto as Schedule
3.7(b)(ii) is a correct and complete list of all Excluded Beneficial Interests as of the date
hereof.




          (c) Annexed hereto as Schedule 3.7(c) is a correct and complete list of all Inactive
Subsidiaries as of the date hereof.




          (d) Annexed hereto as Schedule 3.7(d) is a correct and complete list of all Unrestricted
Subsidiaries as of the date hereof.




     SECTION 3.8 Copyrights, Trademarks and Other Rights. (a) On the date hereof, the
items of Product listed on Schedule 3.8(a)(i) hereto comprise all of the Product in which any
Credit Party has any right, title or interest (either directly, through a joint venture or
partnership or otherwise). Schedule 3.8(a)(ii) sets out a true and complete record of the
copyright registration numbers and the character of the interests held by the relevant Credit Party
for the items of Product listed on Schedule 3.8(a)(ii) which have been duly recorded in the United
States Copyright Office and the Canadian Intellectual Property Office and copies of all



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such recordations have been made available to the Administrative Agent. To the best of each
Credit Party’s knowledge, all items of Product and all component parts thereof do not and will not
violate or infringe upon any copyright, right of privacy, trademark, patent, trade name, performing
right or any literary, dramatic, musical, artistic, personal, private, several, care, contract,
property or copyright right or any other right of any Person, in any material respect or contain
any libelous or slanderous material. There is no claim, suit, action or proceeding pending or, to
the best of each Credit Party’s knowledge, threatened against any Credit Party that involves a
claim of infringement of any copyright with respect to any item of Product listed on Schedule
3.8(a)(i), and no Credit Party has any knowledge of any existing infringement by any other Person
of any copyright held by any Credit Party with respect to any item of Product listed on Schedule
3.8(a)(i).



          (b) Schedule 3.8(b) hereto (i) lists all the trademarks registered by any Credit Party on the
date hereof and identifies the Credit Party which registered each such trademark and (ii) specifies
as to each, the jurisdictions in which such trademark has been issued or registered (or, if
applicable, in which an application for such issuance or registration has been filed), including
the respective registration or application numbers and applicable dates of registration or
application and (iii) specifies as to each, as applicable, material licenses, sublicenses and other
material agreements as of the date hereof (other than any agreements which relate to the
exploitation of an item of Product), to which any Credit Party is a party and pursuant to which any
Person, other than a Credit Party, is authorized to use such trademark. Each trademark set forth
on Schedule 3.8(b) will be included on Schedule A to the Trademark Security Agreement to be
delivered to the Administrative Agent on or prior to the Closing Date pursuant to Section 4.1(h).




          (c) All applications and registrations for all copyrights, trademarks, service marks, trade
names and service names in which any Credit Party has any right, title or interest are valid and in
full force and effect (other than (i) items of Product that, in the aggregate, account for no more
than 10% of the total value of all items of Product listed on Schedule 3.8(a) and (ii) trademarks,
service marks, trade names and service names that in the aggregate are not material) and are not
subject to the payment of any taxes or maintenance fees or the taking of any other actions by the
Credit Parties to maintain their validity or effectiveness.




     SECTION 3.9 Fictitious Names. Except as disclosed on Schedule 3.9, none of the Credit
Parties has done business, is doing business or intends to do business other than under its full
corporate or company (as applicable) name, including, without limitation, under any trade name or
other doing business name.



     SECTION 3.10 Title to Properties. The Credit Parties have good title to each of the
properties and assets reflected on the most recent financial statements referred to in Section 3.5
or delivered pursuant to Section 5.1(a) hereof (other than such properties or assets disposed of in
the ordinary course of business since the date of such financial statements) and all such
properties and assets are free and clear of Liens, except Permitted Encumbrances.



     SECTION 3.11 Places of Business. The chief executive office of each Credit Party is,
on the date hereof, as set forth on Schedule 3.11 hereto. All of the places where each



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Credit Party keeps the records concerning the Collateral on the date hereof or regularly keeps
any goods included in the Collateral on the date hereof are also listed on Schedule 3.11 hereto.



     SECTION 3.12 Litigation. Except as set forth in Schedule 3.12, there are no actions,
suits or other proceedings at law or in equity by or before any arbitrator or arbitration panel, or
any Governmental Authority (including, but not limited to, matters relating to environmental
liability) or any investigation by any Governmental Authority of the affairs of, or to the best of
each Credit Party’s knowledge, threatened action, suit or other proceeding against or affecting,
any Credit Party or of any of their respective properties or rights which either (A) if adversely
determined, could reasonably be expected to have a Material Adverse Effect or (B) relate to this
Credit Agreement or any of the transactions contemplated hereby. No Credit Party is in default
with respect to any order, writ, injunction, decree, rule or regulation of any Governmental
Authority binding upon such Person, which default could reasonably be expected to have a Material
Adverse Effect.



     SECTION 3.13 Federal Reserve Regulations. No Credit Party is engaged principally or
as one of its important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. No part of the proceeds of the Loans will be used,
directly or indirectly, whether immediately, incidentally or ultimately (i) to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or (ii) for any other purpose, in each case, violative of or inconsistent with any of the
provisions of any regulation of the Board, including, without limitation, Regulations T, U and X
thereto.



     SECTION 3.14 Investment Company Act. No Credit Party is, or will during the term of
this Credit Agreement be, (i) an “investment company”, within the meaning of the Investment
Company Act of 1940, as amended, or (ii) subject to regulation under the Federal Power Act or any
foreign, federal or local statute or any other Applicable Law of the United States of America,
Canada or any other jurisdiction, in each case limiting its ability to incur indebtedness for money
borrowed as contemplated hereby or by any other Fundamental Document.



     SECTION 3.15 Taxes. Each Credit Party has filed or caused to be filed all federal,
state, local and foreign tax returns which are required to be filed with any Governmental Authority
after giving effect to applicable extensions, and has paid or has caused to be paid all taxes as
shown on said returns or on any assessment received by them in writing, to the extent that such
taxes have become due, except as permitted by Section 5.13 hereof. No Credit Party knows of any
material additional assessments or any basis therefor. The Credit Parties believe that the
charges, accrual and reserves on its books in respect of taxes or other governmental charges are
accurate.



     SECTION 3.16 Compliance with ERISA. (a) Each U.S. Plan has been maintained and
operated in all material respects in accordance with all applicable laws, including ERISA and the
Code, and each U.S. Plan intended to qualify under section 401(a) of the Code so qualifies. No
Reportable Event has occurred in the last five years as to any U.S. Plan, and the present value of
all benefits under all U.S. Plans subject to Title IV of ERISA (based on those assumptions used to
fund such U.S. Plans) did not, in the aggregate, as of the last annual



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valuation date applicable thereto, exceed the actuarial value of the assets of such U.S. Plans
allocable to such benefits. No material liability has been, and no circumstances exist pursuant to
which any material liability could be, imposed upon any Credit Party or ERISA Affiliate (i) under
sections 4971 through 4980B of the Code, sections 502(i) or 502(l) of ERISA, or under Title IV of
ERISA with respect to any U.S. Plan or Multiemployer Plan, or with respect to any plan heretofore
maintained by any Credit Party or ERISA Affiliate, or any entity that heretofore was an ERISA
Affiliate, (ii) for the failure to fulfill any obligation to contribute to any Multiemployer Plan,
or (iii) with respect to any U.S. Plan that provides post-retirement welfare coverage (other than
as required pursuant to Section 4980B of the Code). Neither any Credit Party nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is in reorganization or has
been terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated.



          (b) The execution, delivery and performance of the Fundamental Documents and the consummation
of the transactions contemplated hereby and thereby will not involve any “prohibited transaction”
within the meaning of ERISA or the Code.




     SECTION 3.17 Agreements. (a) No Credit Party is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument (including, without limitation, any Distribution Agreement) to which it is
a party which could reasonably be expected to result in a Material Adverse Effect.



          (b) Schedule 3.17 is a true and complete listing as of the date hereof of (i) all credit
agreements, indentures, and other agreements related to any indebtedness for borrowed money of any
Credit Party, other than the Fundamental Documents, (ii) all joint venture agreements to which any
Credit Party is a party, (iii) all material Distribution Agreements, (iv) all agreements or other
arrangements pursuant to which a Credit Party has granted a Lien to any Person and (v) all other
contractual arrangements entered into by a Credit Party or by which any Credit Party is bound which
arrangements are material to any Credit Party, including but not limited to, Guaranties and
employment agreements. The Credit Parties have delivered or made available to the Administrative
Agent a true and complete copy of each agreement described on Schedule 3.17, including all exhibits
and schedules. For purposes of this Section 3.17, a Distribution Agreement or other contract,
agreement or arrangement shall be deemed “material” if the Credit Parties reasonably expect
that any Credit Party would, pursuant to the terms thereof, (A) recognize future revenues in excess
of U.S.$40,000,000, (B) incur liabilities or obligations in excess of U.S.$40,000,000 (except with
respect to contingent liabilities or obligations that may become due under acquisition agreements
for individual items of Product) or (C) likely suffer damages or losses in excess of
U.S.$40,000,000 by reason of the breach or termination thereof.




     SECTION 3.18 Security Interest. The execution and delivery of this Credit Agreement
and the other Fundamental Documents, together with the actions taken on or prior to the Closing
Date (including (i) the filing of the appropriate UCC-1 and PPSA financing statements and the
registration of the Hypothec with the filing offices listed on Schedule 3.18, (ii) the filing of
the Copyright Security Agreement with the U.S. Copyright Office and the Canadian Intellectual
Property Office, (iii) the filing of the Trademark Security Agreement with the U.S. Patent and
Trademark Office and (iv) the delivery of the Pledged Securities with



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appropriate stock powers to the Administrative Agent) was and continues to be effective to
create and grant to the Administrative Agent for the benefit of itself, the Issuing Bank and the
Group Lenders, a valid and first priority perfected security interests and hypothecs in the
Collateral, (subject only to Permitted Encumbrances) and in the Pledged Securities.



     SECTION 3.19 Disclosure. Neither this Credit Agreement nor any other Fundamental
Document nor any agreement, document, certificate or statement furnished to the Administrative
Agent for the benefit of the Administrative Agent, the Issuing Bank and the Group Lenders by any
Credit Party in connection with the transactions contemplated hereby, at the time it was furnished
or delivered, contained any untrue statement of a material fact regarding the Credit Parties or,
when taken together with all such other agreements, documents, certificates and statements, omitted
to state a material fact necessary under the circumstances under which it was made in order to make
the statements contained herein or therein not misleading. There is no fact known to any Credit
Party (other than general industry conditions or facts which have been disclosed to the Group
Lenders in writing) which would have or could reasonably be expected in the future to have a
Material Adverse Effect.



     SECTION 3.20 Distribution Rights. Each Credit Party has sufficient right, title and
interest in each item of Product (including both rights under copyright and ownership of or access
to Physical Materials) to enable it (i) to enter into and perform all of the Distribution
Agreements to which it is a party and other agreements generating Eligible Receivables and accounts
receivable reflected on the most recent balance sheet and the most recent Borrowing Base
Certificate delivered to the Group Lenders pursuant hereto, and (ii) to charge, earn, realize and
retain all fees and profits to which such Credit Party is entitled thereunder, and is not in breach
of any of its obligations under such agreements, nor does any Credit Party have any knowledge of
any breach or anticipated breach by any other parties thereto, which breach in either case either
individually or when aggregated with all other such breaches could reasonably be expected to have a
Material Adverse Effect.



     SECTION 3.21 Environmental Liabilities. (a) No Credit Party has used, stored,
treated, transported, manufactured, refined, handled, produced or disposed of any Hazardous
Materials on, under, at, from or in any way affecting, any of its properties or assets owned or
leased by a Credit Party, in any manner which at the time of the action in question violated any
Environmental Law governing the use, storage, treatment, transportation, manufacture, refinement,
handling, production or disposal of Hazardous Materials and to the best of each Credit Party’s
knowledge, no prior owner of such property or asset or any tenant, subtenant, prior tenant or prior
subtenant thereof has used Hazardous Materials on or affecting such property or asset, or
otherwise, in any manner which at the time of the action in question violated any Environmental Law
governing the use, storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials.



          (b) To the best of each Credit Party’s knowledge (i) no Credit Party has any obligations or
liabilities, known or unknown, matured or not matured, absolute or contingent, assessed or
unassessed, which could reasonably be expected to have a Material Adverse Effect and (ii) no claims
have been made against any of the Credit Parties in the past five years and no presently
outstanding citations or notices have been issued against any of the Credit Parties, which could
reasonably be expected to have a Material Adverse Effect which in either case have




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been or are imposed by reason of or based upon any provision of any Environmental Law,
including, without limitation, any such obligations or liabilities relating to or arising out of or
attributable, in whole or in part, to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation or handling of any Hazardous Materials by any Credit Party, or
any of its employees, agents, representatives or predecessors in interest in connection with or in
any way arising from or relating to any of the Credit Parties or any of their respective owned or
leased properties, or relating to or arising from or attributable, in whole or in part, to the
manufacture, processing, distribution, use, treatment, storage, disposal, transportation or
handling of any such substance, by any other Person at or on or under any of the real properties
owned or used by any of the Credit Parties or any other location where such could reasonably be
expected to have a Material Adverse Effect.




     SECTION 3.22 Pledged Securities. (a) Annexed hereto as Schedule 3.22 is a correct
and complete list as of the date hereof, of all the Pledged Securities hereunder showing, as to
each, the entity whose stock or other Equity Interests are being pledged, the Pledgor of such stock
or other Equity Interests, the stock certificate number (as applicable) and the number of shares or
amount of the capital stock or other Equity Interests being pledged hereunder. Each Pledgor (i) is
the legal and beneficial owner of, and has sole right, title and interest to, the Pledged
Securities owned by such Pledgor, free and clear of all Liens, security interests or other
encumbrances whatsoever, except the security interests created by this Credit Agreement and the
other Fundamental Documents and (ii) has sole right and power to pledge, and grant the security
interest in, and Lien upon, such Pledged Securities pursuant to this Credit Agreement without the
consent of any Person or Governmental Authority whatsoever other than any such consent which shall
have been obtained on or before the Closing Date.



          (b) All of the Pledged Securities are duly authorized, validly issued, fully paid and
non-assessable.




          (c) Except for contractual restrictions disclosed on Schedule 3.22 and restrictions created
herein or under applicable securities laws and the regulations promulgated thereunder, there are no
restrictions on the transfer of any of the Pledged Securities. Except for restrictions under
applicable securities laws and the regulations promulgated thereunder, there are no restrictions on
the transfer of any of the Pledged Securities which would limit the ability of the Administrative
Agent to foreclose upon and dispose of any of the Pledged Securities upon the occurrence of an
Event of Default.




          (d) Except as set forth on Schedule 3.22, there are no warrants, options, conversion or
similar rights currently outstanding with respect to, and no agreements to purchase or otherwise
acquire, any shares of the capital stock or other Equity Interests of any issuer of any of the
Pledged Securities; and there are no securities or obligations of any kind convertible into any
shares of the capital stock or other Equity Interests of any issuer of any of the Pledged
Securities.




          (e) Article 10 of this Credit Agreement creates in favor of the Administrative Agent (on
behalf of the Administrative Agent, the Issuing Bank and the Group Lenders) a valid, binding and
enforceable security interest in, and Lien upon, all right, title and interest of the Pledgors in
the Pledged Securities and constitutes a fully perfected first and prior security




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interest and Lien upon all right, title and interest of the Pledgors in such Pledged
Securities subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency,
reorganization and similar laws affecting creditors’ rights generally and to general principles of
equity.




     SECTION 3.23 Compliance with Laws. No Credit Party is in violation of any Applicable
Law except for such violations in the aggregate which would not have a Material Adverse Effect.
The Borrowings hereunder, the intended use of the proceeds of the Loans as described in the
preamble hereto and as contemplated by Section 5.19 hereof and any other transactions contemplated
hereby will not violate any Applicable Law.



4. CONDITIONS PRECEDENT




     SECTION 4.1 Conditions Precedent to Effectiveness of this Amendment and Restatement.
The effectiveness of this amendment and restatement of the Existing Credit Agreement and the making
of the initial Loan are subject to the satisfaction in full of the following conditions precedent:



          (a) Corporate Documents. The Administrative Agent shall have received, with copies
for each of the Group Lenders:




               (i) a copy of the articles or certificate of incorporation or other organizational document of
each Credit Party, certified on a recent date by the Secretary of State (or other appropriate
governmental official if such party is organized outside the United States) of such Credit Party’s
jurisdiction of incorporation or organization, as the case may be;



               (ii) a certificate of the Secretary of State or other appropriate governmental official of
such jurisdiction of incorporation or organization, dated as of a recent date as to the good
standing of, and (to the extent available) payment of taxes by, each Credit Party which certificate
lists the charter documents on file in the office of such Secretary of State or other appropriate
governmental official;



               (iii) subject to 5.26(b), a certificate dated as of a recent date as to the good standing of
each Credit Party issued by the Secretary of State or other appropriate governmental official of
each jurisdiction in which such Credit Party is qualified as a foreign corporation or foreign
limited liability company as listed in Schedule 3.1(a) hereto;



               (iv) a certificate of the Secretary of each Credit Party, dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the by-laws or limited
liability company agreement, as the case may be, of such party as in effect on the date of such
certification; (B) that attached thereto is a true and complete copy of the resolutions adopted by
the Board of Directors of such party authorizing the execution, delivery and performance in
accordance with their respective terms of the Fundamental Documents executed by such Credit Party
and any other documents required or contemplated hereunder or thereunder, the grant of the security
interests in the Collateral and the Pledged Securities, and in the case of the Borrowers, the
borrowings hereunder, and that such resolutions have not been amended, rescinded or supplemented
and are currently in effect; (C) that the certificate of incorporation or



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organization of such party has not been amended since the date of the last amendment thereto
indicated on the certificates of the Secretary of State or other appropriate governmental official
furnished pursuant to clause (i) above; and (D) as to the incumbency and specimen signature of each
officer of such party executing any Fundamental Document (such certificate to contain a
certification by another officer of such party as to the incumbency and signature of the officer
signing the certificate referred to in this clause (iv)); and



               (v) such additional supporting documents as the Administrative Agent or its counsel or any
Group Lender may reasonably request.



          (b) Credit Agreement; Notes. The Administrative Agent shall have received (i)
executed counterparts of this Credit Agreement, which, when taken together, bear the signatures of
the Administrative Agent, the Issuing Bank, all of the Credit Parties and all of the Group Lenders
and (ii) the Notes executed by the Borrowers.




          (c) Opinion of Counsel. The Administrative Agent shall have received the written
opinions of Heenan Blaikie LLP, Canadian counsel to the Credit Parties, O’Melveny & Myers LLP,
United States counsel to the Credit Parties, Greenberg Traurig LLP, Florida counsel to certain
Credit Parties, Drinker Biddle and Reath LLP, Pennsylvania counsel to certain Credit Parties,
Oslwang, UK counsel to the UK Borrower and its Subsidiaries, each dated the Closing Date and
addressed to the Administrative Agent and the Group Lenders which opinions shall be substantially
in the forms attached hereto as Exhibits B-1, B-2, B-3, B-4 and B-5, respectively, and otherwise in
form and substance satisfactory to the Administrative Agent and to Morgan, Lewis & Bockius LLP,
counsel to the Administrative Agent and Fraser Milner Casgrain LLP, special Canadian counsel to the
Administrative Agent. Notwithstanding the foregoing, the Administrative Agent agrees that the
Credit Parties are not required to deliver and opinion in respect of Lions Gate Films of Puerto
Rico, Inc.




          (d) No Material Adverse Change. No material adverse change shall have occurred with
respect to the business, operations, performance, assets, properties, condition (financial or
otherwise) or prospects of the Credit Parties taken as a whole from March 31, 2008.




          (e) Insurance. The Borrowers shall have furnished the Administrative Agent with (i) a
summary of all existing insurance coverage, (ii) evidence acceptable to the Administrative Agent
that the insurance policies required by Section 5.5 have been obtained and are in full force and
effect and (iii) Certificates of Insurance with respect to all existing insurance coverage which
certificates shall name JPMorgan Chase Bank, as Administrative Agent, as the certificate holder and
shall evidence the Credit Parties’ compliance with Section 5.5 with respect to all insurance
coverage existing as of the Closing Date.




          (f) Borrowing Base Certificate. The Administrative Agent shall have received an
initial Borrowing Base Certificate substantially in the form of Exhibit I hereto, signed by an
Authorized Officer.




          (g) Security and Other Documentation. The Administrative Agent shall have received
fully executed copies of (i) intentionally omitted; (ii) a Copyright Security Agreement
Supplement listing each item of Product in which any Credit Party has a copyrightable interest




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(as listed on Schedule 3.8(a) hereto) and for which the Administrative Agent has not
previously recorded its security interest with the Copyright Office executed by each such Credit
Party; (iii) a Trademark Security Agreement for each trademark in which any Credit Party has any
interest (as listed on Schedule 3.8(b) hereto) executed by each such Credit Party; (iv) a Hypothec
executed by each Credit Party domiciled or located in the Province of Quebec and each Credit Party
where Collateral with respect to such Credit Party is located in, or perfection of a Lien in such
Collateral is required under the Applicable Laws of the Province of Quebec or under any applicable
PPSA; (v) intentionally omitted; (vi) appropriate UCC-1 and PPSA financing statements
relating to the Collateral; (vii) all certificates evidencing any of the Pledged Securities with
appropriate undated stock powers executed in blank; and (viii) deeds of hypothec, debentures and
debenture pledge agreements in form and substance satisfactory to the Administrative Agent. For
purposes of this Section 4.1(g), “Credit Party” shall not include the Australia Borrower.




          (h) Security Interests in Copyrights and other Collateral. The Administrative Agent
shall have received evidence satisfactory to it that each Credit Party, has sufficient right, title
and interest in and to the Collateral and other assets which it purports to own (including
appropriate licenses under copyright), as set forth in the documents and other materials presented
to the Group Lenders, to enable such Credit Party to perform the Distribution Agreements to which
such Credit Party is a party and as to each Credit Party, to grant to the Administrative Agent for
the benefit of the Administrative Agent, the Issuing Bank and the Group Lenders the security
interests contemplated by the Fundamental Documents, and that all financing statements, copyright
filings and other filings under Applicable Law necessary to provide the Administrative Agent for
the benefit of itself, the Issuing Bank and the Group Lenders with a first priority perfected
security interest in the Pledged Securities and Collateral (subject in the case of the Collateral,
to Permitted Encumbrances) have been filed or delivered to the Administrative Agent in satisfactory
form for filing.




          (i) Payment of Fees. All fees and expenses then due and payable by any Credit Party
to the Administrative Agent and/or the Group Lenders in connection with the transactions
contemplated hereby or as required by the Fee Letter shall have been paid.




          (j) Intentionally Omitted.




          (k) Intentionally Omitted.




          (l) Notices of Assignment and Irrevocable Instructions. The Administrative Agent
shall have received with respect to each Eligible Receivable or Acceptable Tax Credit included in
the initial Borrowing Base Certificate, a Notice of Assignment and Irrevocable Instructions
executed by the appropriate Credit Party.




          (m) Chain of Title. The Administrative Agent shall have received copies of all
agreements, instruments of transfer or other instruments (in recordable form) (including, without
limitation, the rights agreements) necessary to establish, to the satisfaction of the
Administrative Agent, with respect to a sufficient number of items of Product included in the
Borrowing Base as determined in the Administrative Agent’s sole discretion, the applicable Credit
Party’s ownership of sufficient copyright rights in each Completed item of Product and in the
literary




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properties upon which each Uncompleted item of Product is to be based to enable such Credit
Party to produce and/or distribute such item of Product and to grant to the Administrative Agent
for the benefit of the Group Lenders the security interests which are contemplated by this Credit
Agreement.




          (n) Litigation. No litigation, governmental or administrative inquiry, inquiry from
any stock exchange on which LGEC is listed, injunction or restraining order shall be pending,
entered or threatened which involves this Credit Agreement or which in the Administrative Agent’s
good faith judgment could reasonably be expected to have a Material Adverse Effect.




          (o) UCC/PPSA Searches. The Administrative Agent shall have received UCC, PPSA,
copyright office and other searches satisfactory to it indicating that no other filings,
encumbrances or transfers (other than in connection with Permitted Encumbrances) with regard to the
Collateral are of record in any jurisdiction in which it shall be necessary or desirable for the
Administrative Agent to make a UCC or PPSA filing in order to provide the Administrative Agent (for
the benefit of the Administrative Agent, the Issuing Bank or the Group Lenders) with a perfected
security interest in the Collateral.




          (p) ERISA. The Administrative Agent shall have received or had made available to it,
copies of all U.S. Plans of the Credit Parties that are in existence on the Closing Date, and
descriptions of those that are committed to on the Closing Date.




          (q) Contribution Agreement. The Administrative Agent shall have received a fully
executed Contribution Agreement duly executed by each of the Credit Parties.




          (r) Delivery of Agreements. The Administrative Agent shall have received and be
satisfied with the terms and provisions of (i) all existing output and distribution agreements,
(ii) all material agreements listed on Schedule 3.17 and (iii) all other agreements to the
extent requested by the Administrative Agent.




          (s) Required Consents and Approvals. The Administrative Agent shall be satisfied that
all required consents and approvals have been obtained with respect to the transactions
contemplated hereby from all Governmental Authorities with jurisdiction over the business and
activities of any Credit Party and from any other entity whose consent or approval the
Administrative Agent in its reasonable discretion deems necessary to the transactions contemplated
hereby.




          (t) Federal Reserve Regulations. The Administrative Agent shall be satisfied that the
provisions of Regulations T, U and X of the Board will not be violated by the transactions
contemplated hereby.




          (u) Compliance with Laws. The Administrative Agent shall be satisfied that the
transactions contemplated hereby will not violate any provision of Applicable Law, or any order of
any court or other agency of the United States or Canada or any state or province thereof
applicable to any of the Credit Parties or any of their respective properties or assets.




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          (v) Approval of Counsel to the Administrative Agent. All legal matters incidental to
this Credit Agreement and the transactions contemplated hereby shall be reasonably satisfactory to
Morgan, Lewis & Bockius LLP, counsel to the Administrative Agent and Fraser Milner Casgrain,
special Canadian counsel to the Administrative Agent.




     SECTION 4.2 Conditions Precedent to Each Loan and Letter of Credit. The obligation of
the Issuing Bank to issue each Letter of Credit and of the Group Lenders to make each Loan, and to
participate in each Letter of Credit (including the initial Loan and/or Letter of Credit) are
subject to the following conditions precedent:



          (a) Notice. The Administrative Agent shall have received a notice with respect to
such Borrowing, or the Issuing Bank shall have received a notice with respect to such Letter of
Credit as required by Article 2 hereof.




          (b) Borrowing Certificate. The Administrative Agent shall have received a Borrowing
Certificate, duly executed by an Authorized Officer on behalf of the Borrowers.




          (c) Representations and Warranties. The representations and warranties set forth in
Article 3 hereof and in the other Fundamental Documents shall be true and correct in all material
respects on and as of the date of each Borrowing, and/or issuance of each Letter of Credit
hereunder (except to the extent that such representations and warranties expressly relate to an
earlier date) with the same effect as if made on and as of such date.




          (d) No Event of Default. On the date of each Borrowing , or issuance of each Letter
of Credit, no Default or Event of Default shall have occurred and be continuing, nor shall any such
event occur by reason of the making of such Loan, or the issuance of such Letter of Credit.



Each request for a Borrowing or for issuance of a Letter of Credit shall be deemed to be a
representation and warranty by the Borrowers on the date of such Borrowing or issuance of such
Letter of Credit as to the matters specified in paragraphs (c) and (d) of this Section 4.2.




     SECTION 4.3 Conditions Precedent to Loans and/or Letters of Credit under the Special
Production Tranche. The obligations of the Issuing Bank to issue Letters of Credit as part of
the Special Production Tranche and of each Group Lender to make Loans as part of the Special
Production Tranche and/or participate in such Letters of Credit is subject to the following
conditions precedent (in addition to those conditions precedent set forth in Section 4.2):



          (a) Declaration. The Administrative Agent shall have received from the Borrowers a
written notice specifying the details of the Designated Picture involved, whether the producer of
the Designated Picture is a Credit Party or a Special Purpose Producer and declaring an appropriate
portion of the LGEI Commitments, as applicable, as being reserved as part of the Special Production
Tranche for such Designated Picture and specifying whether the Loans to finance the production of
such Designated Picture are to be made to LGEI, another Credit Party or directly to a Special
Purpose Producer.




          (b) Special Purpose Producer Credit Agreement. If the Designated Picture is being
produced by a Special Purpose Producer that is not a Credit Party, (i) the Administrative




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Agent shall have received a fully executed Special Purpose Producer Credit Agreement and all
other conditions precedent thereunder shall have been satisfied and (ii) an Eligible Pick-Up Party
shall have provided a negative pickup commitment or production cash flow commitment (or a
combination thereof) with respect to such Designated Picture.




          (c) Supporting Documentation. The Administrative Agent shall have received such
additional supporting documentation as it normally requires in connection with single picture
financing relating to the Designated Picture (including, but not limited to, Chain of Title,
budget, cash flows, the negative pickup or other payment obligation from the applicable Credit
Party or a guarantee from the applicable Credit Party) in form and substance reasonably
satisfactory to the Administrative Agent.




          (d) Completion Guaranty. If the Production Exposure for such Designated Picture
exceeds U.S.$20,000,000 or if otherwise required by the Administrative Agent in its discretion, the
Administrative Agent shall have received a Completion Guaranty from an Approved Completion
Guarantor.




          (e) Co-Productions, etc. If any portion of the Designated Picture is to be financed
by a third party or if a third party is to have any ownership interest in such Designated Picture
or its copyright, then such third party shall have been approved by the Administrative Agent and
the Administrative Agent shall have received and be satisfied with the co-financing agreement, an
intercreditor agreement and such other documentation as it shall deem appropriate.




          (f) Security Documentation. If the Designated Picture is being produced by a Credit
Party, the Administrative Agent shall have received all appropriate security documentation and
proof of filings, required by it, in connection with the creation of a first perfected lien in
favor of the Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and
the Group Lenders.




          (g) Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate which sets forth the Borrowing Base as of the date no more than seven
(7) Business Days before the notice of Borrowing is made in connection herewith and which reflects
the reserves for the Designated Picture involved.




5. AFFIRMATIVE COVENANTS




          From the date hereof and for so long as the Commitments shall be in effect, any amount shall
remain outstanding under the Notes, or L/C Exposure shall remain outstanding or any monetary
Obligation then due and payable shall remain unpaid or unsatisfied, each Credit Party agrees that,
unless the Required Lenders shall otherwise consent in writing, each of them will, and will cause
each of its Subsidiaries (other than the Unrestricted Subsidiaries or the Inactive Subsidiaries)
to:




     SECTION 5.1 Financial Statements and Reports. Furnish or cause to be furnished to the
Administrative Agent electronically or in sufficient numbers for distribution to the Issuing Bank
and the Group Lenders:



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          (a) Within one hundred (100) days after the end of each fiscal year of LGEC (commencing with
fiscal year 2008), the audited consolidated balance sheet of LGEC and its Consolidated
Subsidiaries, in each case as at the end of, and the related statements of income, stockholders’
equity and cash flows for, such year, and the corresponding figures as at the end of, and for, the
preceding fiscal year, accompanied by an unqualified report and opinion of Ernst & Young or such
other independent public accountant of nationally recognized standing as shall be retained by LGEC
and be satisfactory to the Required Lenders, which report and opinion shall be prepared in
accordance with generally accepted auditing standards relating to reporting and which report and
opinion shall contain no material exceptions or qualifications except for qualifications relating
to accounting changes (with which such independent public accountants concur) in response to FASB
releases or other authoritative pronouncements, together with a certificate signed by an Authorized
Officer, to the effect that such financial statements fairly present the financial position of LGEC
and its Consolidated Subsidiaries as at the dates indicated and the results of their operations for
the periods indicated in conformity with GAAP;




          (b) Within fifty-five (55) days after the end of each of the first three fiscal quarters of
each of its fiscal years, the unaudited consolidated balance sheets of LGEC and its Consolidated
Subsidiaries as at the end of, and the related unaudited consolidated statements of operations and
deficit and cash flow for, such quarter, and for the portion of the fiscal year through the end of
such quarter, and the corresponding figures as at the end of such quarter, and for the
corresponding period, in the preceding fiscal year, together with a certificate signed by an
Authorized Officer, to the effect that such financial statements, while not examined by independent
public accountants, reflect, in the opinion of LGEC, all adjustments necessary to present fairly
the financial position of LGEC and its Consolidated Subsidiaries as at the end of the fiscal
quarter and the results of operations for the quarter then ended in conformity with GAAP, subject
to normal year-end audit adjustments and the absence of footnotes;




          (c) Simultaneously with the delivery of the statements referred to in paragraphs (a) and (b)
of this Section 5.1, a certificate of an Authorized Officer in form and substance reasonably
satisfactory to the Administrative Agent (i) stating whether or not such Authorized Officer has
knowledge, after due inquiry, of any condition or event which would constitute an Event of Default
or Default and, if so, specifying each such condition or event and the nature thereof, (ii)
demonstrating in reasonable detail compliance with the provisions of Sections 6.11, 6.19, 6.20 and
6.21 hereof and including supporting schedules, (iii) certifying that all filings required under
Section 5.8 hereof have been made and listing each such filing that has been made since the date of
the last certificate delivered in accordance with this Section 5.1(c) and (iv) setting forth for
each of the next four quarters all projected payments to be made by any Credit Parties of minimum
guarantees and other Off-Balance Sheet Commitments;




          (d) (i) On or prior to the last Business Day of each month, a certificate (“Borrowing Base
Certificate”) substantially in the form of Exhibit I hereto, setting forth the amount of each
component included in the Borrowing Base as of the last Business Day of the preceding month,
attached to which shall be detailed information as required by such certificate including, without
limitation, supporting schedules showing the calculation of each component of the Borrowing Base
(LGEI, at its option, may furnish additional Borrowing Base Certificates setting forth such
information as of such other dates as it may deem appropriate);




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          (e) Promptly upon their becoming available, copies of all significant audits prepared for or
submitted to any of the Credit Parties by any outside professional firm or service, including,
without limitation, any comment letter submitted by the Credit Parties’ accountants to management
in connection with their annual audit;




          (f) Within ten (10) days of receipt thereof by each Borrower, copies of all management letters
issued to such Borrower by its auditors;




          (g) Promptly upon their becoming available, copies of (i) all registration statements, proxy
statements, notices and reports which LGEC or any other Credit Party shall file with any securities
exchange or with the United States Securities and Exchange Commission or any Canadian securities
commission or any successor agency and (ii) all reports, financial statements, press releases and
other information which LGEC or any other Credit Party shall release, send or make available to its
common stockholders generally;




          (h) Not later than July 31st of each year, the calculation of the Eligible Library Amount
computed as of the last Business Day of March of such calendar year together with a variance
analysis of the actual versus projected value of such calculation.




          (i) At least annually and not later than July 31st of each year, forecasted financial
statements consisting of balance sheets, cash flow statements, income statements, and Borrowing
Base with supporting detail and underlying assumptions, covering the next four fiscal quarters.




          (j) From time to time such additional information regarding the financial condition or
business of any of the Credit Parties, any item of Product, any Distribution Agreement, any
Eligible Receivable or the Collateral, as the Administrative Agent or any Group Lender acting
through the Administrative Agent may reasonably request.




     SECTION 5.2 Corporate Existence; Compliance with Laws. Do or cause to be done all
things necessary (i) to preserve, renew and keep in full force and effect its corporate existence,
rights, licenses, permits and franchises and (ii) to comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, any Governmental Authority,
except as otherwise permitted under Section 6.7.



     SECTION 5.3 Maintenance of Properties. Keep its tangible properties which are
material to its business in good repair, working order and condition (ordinary wear and tear
excepted) unless the Borrowers determine in good faith that the continued maintenance of such
properties are not economically desirable (after consultation with the Administrative Agent) and,
from time to time (i) make all necessary and proper repairs, renewals, replacements, additions and
improvements thereto and (ii) comply at all times with the provisions of all material leases and
other material agreements to which it is a party so as to prevent any loss or forfeiture thereof or
thereunder unless compliance therewith is being currently contested in good faith by appropriate
proceedings and appropriate reserves have been established in accordance with GAAP.



     SECTION 5.4 Notice of Material Events. (a) Promptly upon any executive officer of
any Credit Party obtaining knowledge of (i) any Default or Event of Default, (ii) any



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material adverse change in the condition (financial or otherwise) or operations of any Credit
Party, (iii) any action or event which could reasonably be expected to materially and adversely
affect the performance of the Credit Parties’ obligations under this Credit Agreement or any other
Fundamental Document, the repayment of the Notes or the security interests granted to the
Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank or the Group
Lenders under this Credit Agreement or any other Fundamental Document, (iv) any other event which
could reasonably be expected to result in a Material Adverse Effect, (v) the opening of any office
of any Credit Party or the change of the chief executive office or the principal place of business
of any Credit Party or of the location of any Credit Party’s books and records with respect to the
Collateral, (vi) any change in the name of any Credit Party, (vii) any other event which could
reasonably be expected to materially and adversely impact upon the amount or collectibility of
accounts receivable of the Credit Parties or otherwise materially decrease the value of the
Collateral or the Pledged Securities, (viii) any proposed material amendment to any agreements that
are part of the Collateral or (ix) any Person giving any notice to any Credit Party or taking any
other action to enforce remedies with respect to a claimed default or event or condition of the
type referred to in paragraph (g) or (h) of Article 7, such Credit Party shall promptly give
written notice thereof to the Administrative Agent specifying the nature and period of existence of
any such condition or event, or specifying the notice given or action taken by such Person and the
nature of such claimed Event of Default or condition and what action any Credit Party has taken, is
taking and proposes to take with respect thereto.



          (b) Promptly upon any executive officer of any Credit Party obtaining knowledge of (i) the
institution of, or threat of, any action, suit, proceeding, investigation or arbitration by any
Governmental Authority or other Person against or affecting any Credit Party or any of its assets
or any item of Product, or (ii) any material development in any such action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed to the Group Lenders), which, in
the case of (i) or (ii), if adversely determined could reasonably be expected to have a Material
Adverse Effect, such Credit Party shall promptly give written notice thereof to the Administrative
Agent and provide such other information as may be available to it to enable the Group Lenders to
evaluate such matters; and, in addition to the requirements set forth in clauses (i) and (ii) of
this subsection (b), such Credit Party upon request shall promptly give notice of the status of any
action, suit, proceeding, investigation or arbitration covered by a report delivered to the Group
Lenders pursuant to clause (i) and (ii) above to the Group Lenders and provide such other
information as may be reasonably available to it to enable the Group Lenders to evaluate such
matters.




     SECTION 5.5 Insurance. (a) Keep its assets which are of an insurable character
insured (to the extent and for the time periods consistent or greater than normal industry
standards) by financially sound and reputable insurers against loss or damage by fire, explosion,
theft or other hazards which are included under extended coverage in amounts not less than the
insurable value of the property insured or such lesser amounts, and with such self-insured
retention or deductible levels, as are consistent with normal industry standards.



          (b) Maintain with financially sound and reputable insurers, insurance against other hazards
and risks and liability to Persons and property to the extent and in the manner consistent or
greater than normal industry standards.




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          (c) Maintain, or cause to be maintained, in effect during the period from the commencement of
principal photography of each item of Product produced by any Credit Party or from the date of
acquisition of each item of Product acquired by any Credit Party, through the third anniversary of
the date on which such item of Product is Completed and as otherwise required by applicable
contracts, a so-called “Errors and Omissions” policy covering all such items of Product, and cause
such Errors and Omissions policy to provide coverage to the extent and in such manner as is
customary for items of Product of like type but, at minimum, to the extent and in such manner as is
required under all applicable contracts relating thereto (including, without limitation, any
Distribution Agreement relating to such item of Product).




          (d) Maintain, or cause to be maintained, in effect during the period from the commencement of
principal photography of each item of Product produced by any Credit Party, or from the date of
acquisition of each item of Product acquired by any Credit Party (i) until such time as the
Administrative Agent shall have been provided with satisfactory evidence of the existence of one
negative or master tape in one location and an interpositive, internegative or duplicate master
tape in another location of the final version of the Completed Product, insurance on the negatives
and sound tracks or master tapes of such item of Product in an amount not less than the cost of
re-shooting the principal photography of the item of Product and otherwise re-creating such item of
Product, and (ii) until principal photography of such item of Product has been concluded, a cast
insurance policy with respect to such item of Product, which provides coverage to the extent and in
such manner as is customary for items of Product of a like type, but at minimum, to the extent
required under all applicable contracts relating thereto.




          (e) Maintain, or cause to be maintained, in effect distributor’s “Errors and Omissions”
insurance to the extent and in amounts consistent or greater than normal industry standards.




          (f) Cause all such above-described insurance (excluding worker’s compensation insurance) to
(i) provide for the benefit of the Group Lenders that 30 days’ prior written notice of
cancellation, termination, non-renewal or lapse or material change of coverage shall be given to
the Administrative Agent; (ii) name the Administrative Agent for the benefit of the Administrative
Agent, the Issuing Bank and the Group Lenders as a loss payee (except for “Errors and Omissions”
insurance and other third party liability insurance), provided, however, that so
long as no Event of Default has occurred and is continuing, production insurance recoveries
received prior to Completion or abandonment of an item of Product may be utilized to finance the
production of such an item of Product, and property insurance proceeds may be used to repair damage
in respect of which such proceeds were received or so long as no Default or Event of Default has
occurred and is then continuing, to reimburse a Credit Party for its own funds expended to repair
the applicable damage; and (iii) to the extent that none of the Administrative Agent, the Issuing
Bank or the Group Lenders shall be liable for premiums or calls, name the Administrative Agent (for
the benefit of the Administrative Agent, the Issuing Bank and the Group Lenders) as additional
insureds including, without limitation, under any “Errors and Omissions” policy.




          (g) Render to the Administrative Agent upon the request of the Administrative Agent a broker’s
report in form and substance satisfactory to the Administrative Agent as to all such insurance
coverage including such detail as the Administrative Agent may request.




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     SECTION 5.6 Production and Distribution. Cause each item of Product being produced by
any Credit Party (i) to be produced in accordance with the standards set forth in, and within the
time period established in, all agreements with respect to such item of Product to which such
Credit Party is a party, subject to the terms and conditions of such agreements and (ii) to be
Completed at least one (1) month prior to the earliest expiration date of any Acceptable L/C
supporting an Eligible Receivable relating to such item of Product which Eligible Receivable is
included in the Borrowing Base and in any event, no later than the Maturity Date.



     SECTION 5.7 Music. When an item of Product has been scored, if requested by the
Administrative Agent, deliver to the Administrative Agent within a reasonable period of time after
such request (i) written evidence of the music synchronization rights, if any, obtained from the
composer or the licensor of the music and (ii) copies of all music cue sheets with respect to such
item of Product.



     SECTION 5.8 Copyrights and Trademarks. (a) As soon as practicable (but in the case
of an item of Product, in no event later than 60 days after the initial release or broadcast of
such item of Product and in the case of a screenplay, in no event later than the date on which the
Credit Parties must comply with Section 5.20 hereof with respect to the item of Product to be based
on such screenplay), to the extent (i) any Credit Party is or becomes the copyright proprietor
thereof or otherwise acquires a copyrightable interest and (ii) any Credit Party acquires any
material trademark, service mark, trade name or service name, take any and all actions necessary to
register the copyright for such item of Product or such trademark, service mark, trade name or
service name, in the name of such Credit Party (subject to a Lien in favor of the Administrative
Agent for the benefit of itself, the Issuing Bank and the Lenders pursuant to the Copyright
Security Agreement and the Trademark Security Agreement Supplement) in conformity with the laws of
the United States, Canada and such other jurisdictions as the Administrative Agent may reasonably
specify, and immediately deliver to the Administrative Agent (i) written evidence of the
registration of any and all such copyrights for inclusion in the Collateral under this Credit
Agreement and (ii) a Copyright Security Agreement Supplement or a Trademark Security Agreement
Supplement relating to such item or such trademark, service mark, trade name or service name,
executed by such Credit Party.



          (b) Obtain instruments of transfer or other documents evidencing the interest of any Credit
Party with respect to the copyright relating to items of Product in which such Credit Party is not
entitled to be the initial copyright proprietor and any trademark, service mark, trade name or
service name which such Credit Party acquires, and promptly record such instruments of transfer on
the United States Copyright Register or the United States Trademark Register and such other
jurisdictions as the Administrative Agent may specify.




     SECTION 5.9 Books and Records. (a) Maintain or cause to be maintained at all times
true and complete books and records of its financial operations and provide the Administrative
Agent and its representatives access to such books and records and to any of its properties or
assets upon reasonable notice and during regular business hours in order that the Administrative
Agent may make such audits and examinations and make abstracts from such books, accounts, records
and other papers pertaining to the Collateral (including, but not limited to, Eligible Receivables
included in the Borrowing Base) and upon notification to the Credit Parties, permit the
Administrative Agent or its representatives to discuss the affairs, finances and



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accounts with, and be advised as to the same by the Credit Parties’ officers and independent
accountants, all as the Administrative Agent may deem appropriate for the purpose of verifying the
accuracy of the Borrowing Base Certificates and the various other reports delivered by any Credit
Party to the Administrative Agent, the Issuing Bank and/or the Group Lenders pursuant to this
Credit Agreement or for otherwise ascertaining compliance with this Credit Agreement or any other
Fundamental Document.



          (b) If, prior to an Event of Default and in connection with the annual outside audit, the
Administrative Agent wishes to confirm with account debtors and other payors the amounts and terms
of any or all Eligible Receivables, Other Domestic Receivables or Other Foreign Receivables (in
each case, both on and off balance sheet) included in the Borrowing Base, the Administrative Agent
will so notify the Credit Parties. The Administrative Agent agrees to have such confirmation made
through the Credit Parties’ auditors. If for any reason such auditors fail to proceed with the
confirmations in a timely matter, the Administrative Agent may, upon notice to the Credit Parties
of such failure, proceed to make such confirmations directly with account debtors and other payors
unless the Credit Parties cure such failure within ten (10) Business Days of such notice. Each of
the Credit Parties hereby agrees that, upon the occurrence and during the continuance of an Event
of Default, the Administrative Agent shall be entitled to confirm directly with account debtors and
other payors, the amounts and terms of all accounts receivable and/or Eligible Receivables.




     SECTION 5.10 Third Party Audit Rights. On a quarterly basis, notify the
Administrative Agent of, and at all times allow the Administrative Agent access to the results of,
all audits conducted by any Credit Party of any third party licensee under any agreement with
respect to any item of Product included in the Collateral or of any partnership, or joint venture.
The Credit Parties will exercise their audit rights with respect to any such third party licensees,
partnerships and joint ventures upon the reasonable request of the Administrative Agent to the
extent that the Credit Parties shall have the right to conduct such audits. After an Event of
Default has occurred and is continuing, the Administrative Agent shall have the right to exercise
through any Credit Party, such Credit Party’s right to audit any obligor under an agreement with
respect to any item of Product included in the Collateral.



     SECTION 5.11 Observance of Agreements. Duly observe and perform all material terms
and conditions of all material agreements with respect to the production, distribution and/or
exploitation of items of Product and diligently protect and enforce the rights of the Credit
Parties under all such agreements in a manner consistent with prudent business judgment and subject
to the terms and conditions of such agreements.



     SECTION 5.12 Laboratories; No Removal. To the extent any Credit Party has control
over, or rights to receive, any of the Physical Materials relating to any item of Product, deliver
or cause to be delivered to a Laboratory or Laboratories all negative and preprint material, master
tapes and all sound track materials with respect to each such item of Product and deliver to the
Administrative Agent a fully executed Pledgeholder Agreement with respect to such materials. To
the extent that any Credit Party has only rights of access to preprint material or master tapes and
has not created duplicate materials sufficient to exploit its rights and has not stored such
duplicate materials at a Laboratory that has delivered a Pledgeholder Agreement to the
Administrative Agent, then the Credit Parties will deliver to the Administrative Agent a fully



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executed Laboratory Access Letter covering such materials. Prior to requesting any such
Laboratory to deliver such negative or other preprint or sound track material or master tapes to
another Laboratory, any such Credit Party shall provide the Administrative Agent with a
Pledgeholder Agreement or Laboratory Access Letter, as appropriate, executed by such other
Laboratory and all other parties to such Pledgeholder Agreement (including the Administrative
Agent). Each Credit Party hereby agrees not to deliver or remove or cause the delivery or removal
of the original negative and film or sound materials or master tapes with respect to any item of
Product owned by such Credit Party or in which such Credit Party has an interest (i) to a location
outside the United States or Canada or such other jurisdiction as may be approved by the
Administrative Agent in its discretion or (ii) to any state or jurisdiction where UCC-1, CCQ or
PPSA financing statements (or in the case of jurisdictions outside the United States and Canada,
documentation similar in purpose and effect satisfactory to the Administrative Agent) have not been
filed against such Credit Party.



          (a) During production of any item of Product produced by any Credit Party, such Credit Party
shall promptly deliver the daily rushes for such item of Product to the appropriate Laboratory.




          (b) With respect to items of Product Completed after the Closing Date, on at least a quarterly
basis, deliver to the Administrative Agent and the Laboratories which are signatories to
Pledgeholder Agreements a revised schedule of Product on deposit with such Laboratories.




     SECTION 5.13 Taxes and Charges; Indebtedness in Ordinary Course of Business. Duly pay
and discharge, or cause to be paid and discharged, before the same shall become in arrears (after
giving effect to applicable extensions), all taxes, assessments, levies and other governmental
charges, imposed upon any Credit Party or its properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for labor, materials, or
supplies which if unpaid might by law become a Lien upon any property of any Credit Party;
provided, however, that any such tax, assessment, levy or charge need not be paid
if the validity or amount thereof shall currently be contested in good faith by appropriate
proceedings and if such Credit Party shall have set aside on its books reserves (the presentation
of which is segregated to the extent required by GAAP) adequate with respect thereto if reserves
shall be deemed necessary; and provided, further, that such Credit Party will pay
all such taxes, assessments, levies or other governmental charges forthwith upon the commencement
of proceedings to foreclose any Lien which may have attached as security therefor. Each of the
Credit Parties will promptly pay when due, or in conformance with customary trade terms, all other
obligations incident to its operations.



     SECTION 5.14 Liens. Defend the Collateral (including, without limitation, the Pledged
Securities) against any and all Liens howsoever arising, other than Permitted Encumbrances, and in
any event defend against any attempted foreclosure.



     SECTION 5.15 Further Assurances; Security Interests. (a) Upon the request of the
Administrative Agent, duly execute and deliver, or cause to be duly executed and delivered, at the
cost and expense of the Credit Parties, such further instruments as may be



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necessary or desirable in the reasonable judgment of the Administrative Agent to carry out the
provisions and purposes of this Credit Agreement and the other Fundamental Documents.



          (b) Upon the request of the Administrative Agent, promptly execute and deliver or cause to be
executed and delivered, at the cost and expense of the Credit Parties, such further instruments as
may be appropriate in the reasonable judgment of the Administrative Agent, to provide the
Administrative Agent for the benefit of the Administrative Agent, the Issuing Bank and the Lenders
a first perfected Lien in the Collateral and any and all documents (including, without limitation,
the execution, amendment or supplementation of any financing statement and continuation statement
or other statement and the filing of termination statements for each of the Liens indicated on
Schedule 6.2 hereof for which the underlying obligation is no longer outstanding) for filing under
the provisions of the UCC, the PPSA and the rules and regulations thereunder, or any other
Applicable Law, and perform or cause to be performed such other ministerial acts which are
reasonably necessary or advisable, from time to time, in order to grant and maintain in favor of
the Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders the security
interest in the Collateral contemplated hereunder and under the other Fundamental Documents,
subject only to Permitted Encumbrances.




          (c) Promptly undertake to deliver or cause to be delivered to the Administrative Agent from
time to time such other documentation, consents, authorizations and approvals in form and substance
reasonably satisfactory to the Administrative Agent, as the Administrative Agent shall deem
reasonably necessary or advisable to perfect or maintain the Liens of the Administrative Agent for
the benefit of itself, the Issuing Bank and the Group Lenders.




     SECTION 5.16 ERISA Compliance and Reports. Furnish to the Administrative Agent (i) as
soon as possible, and in any event within thirty (30) days after any executive officer of a Credit
Party has knowledge that (A) any Reportable Event with respect to any U.S. Plan has occurred, a
statement of an executive officer of the Credit Party, setting forth on behalf of such Credit Party
details as to such Reportable Event and the action which it proposes to take with respect thereto,
together with a copy of the notice, if any, required to be filed of such Reportable Event given to
the PBGC or (B) an accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum funding standard or an
extension of any amortization period under Section 412 of the Code with respect to a U.S. Plan or
Multiemployer Plan has been or is proposed to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA, proceedings have been instituted to terminate a U.S. Plan if
such U.S. Plan is subject to Title IV of ERISA, a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Multiemployer Plan, or any such
Credit Party or ERISA Affiliate will incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a U.S. Plan subject to Title
IV of ERISA or Multiemployer Plan under Sections 4062, 4063, 4201 or 4204 of ERISA, a statement of
an executive officer of the Credit Party, setting forth details as to such event and the action the
applicable Credit Party proposes to take with respect thereto, (ii) promptly upon reasonable
request of the Administrative Agent, copies of each annual and other report with respect to each
U.S. Plan and (iii) promptly after receipt thereof, a copy of any notice any Credit Party or ERISA
Affiliate may receive from



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the PBGC relating to the PBGC’s intention to terminate any U.S. Plan subject to Title IV of
ERISA or to appoint a trustee to administer any U.S. Plan subject to Title IV of ERISA.



     SECTION 5.17 Subsidiaries. Prior to any (i) Inactive Subsidiary becoming active or
(ii) Unrestricted Subsidiary becoming a Credit Party after the date hereof and promptly after
formation or acquisition of any new Subsidiary other than an Inactive Subsidiary (but in any event
prior to commencement of operations by such Subsidiary), the Credit Parties shall cause such
Inactive Subsidiary, former Unrestricted Subsidiary or new Subsidiary, as applicable, to deliver to
the Administrative Agent an Instrument of Assumption and Joinder duly executed by such Subsidiary,
appropriate UCC-1 or PPSA financing statements or Hypothec executed by such Subsidiary, and to the
extent the stock of such Subsidiary has not previously been pledged to the Administrative Agent
(for the benefit of the Group Lenders), the stock certificates of such Subsidiary together with
undated stock powers executed in blank and organizational documents to the extent set forth in
Section 4.1 hereof, and written opinions of counsel in form and substance reasonably satisfactory
to the Administrative Agent. Notwithstanding the foregoing, Pledged Securities shall not include
(a) the Equity Interests of any Controlled Foreign Subsidiary which are owned by another Controlled
Foreign Subsidiary and (b) Equity Interests in excess of 65% of the Equity Interest in any
Controlled Foreign Subsidiary.



     SECTION 5.18 Environmental Laws. Promptly notify the Administrative Agent upon any
Credit Party becoming aware of any violation or potential violation or non-compliance with, or
liability or potential liability under any Environmental Laws which, when taken together with all
other pending violations would reasonably be expected to have a Material Adverse Effect, and
promptly furnish to the Administrative Agent all notices of any nature which any Credit Party may
receive from any Governmental Authority or other Person with respect to any violation, or potential
violation or non-compliance with, or liability or potential liability under any Environmental Laws
which, in any case or when taken together with all such other notices, could reasonably be expected
to have a Material Adverse Effect.



          (a) Comply with and use reasonable efforts to ensure compliance by all tenants and subtenants
with all Environmental Laws, and obtain and comply in all respects with and maintain and use best
efforts to ensure that all tenants and subtenants obtain and comply in all respects with and
maintain any and all licenses, approvals, registrations or permits required by Environmental Laws,
except where failure to do so would not have a Material Adverse Effect.




          (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under all Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all Governmental Authorities, except where
failure to do so would not have a Material Adverse Effect. Any order or directive whose lawfulness
is being contested in good faith by appropriate proceedings shall be considered a lawful order or
directive when such proceedings, including any judicial review of such proceedings, have been
finally concluded by the issuance of a final non-appealable order; provided,
however, that the appropriate Credit Party shall have set aside on its books reserves (the
presentation of which is segregated to the extent required by GAAP) adequate with respect thereto
if reserves shall be deemed necessary.




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          (c) Defend, indemnify and hold harmless the Administrative Agent, the Issuing Bank and the
Group Lenders, and their respective employees, agents, officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way
related to the violation of or non-compliance by any Credit Party with any Environmental Laws, or
any orders, requirements or demands of Governmental Authorities related thereto, including, without
limitation, reasonable external attorney and consultant fees, investigation and laboratory fees,
court costs and litigation expenses, but excluding therefrom all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses arising out of or resulting from (i) the
gross negligence or willful acts or willful misconduct of any indemnified party or (ii) any acts or
omissions of any indemnified party occurring after any indemnified party is in possession of, or
controls the operation of, any property or asset.




     SECTION 5.19 Use of Proceeds. Use the proceeds of the Loans to (i) finance the
development, production, distribution or acquisition of intellectual properties including feature
films, television, interactive media, music and video product and/or rights therein or thereto,
(ii) operate physical production facilities, (iii) acquire and operate television channels and
internet distribution platforms and (iv) for other general corporate purposes, including
acquisitions, permitted stock repurchases and dividends.



     SECTION 5.20 Uncompleted Items of Product. With respect to each item of Product or
seasonal order of a television series for which any Credit Party has Production Exposure in excess
of U.S.$20,000,000, deliver to the Administrative Agent, not later than (A) in the case of an item
of Product being produced by or under the control of any Credit Party, five (5) days prior to the
commencement of principal photography of such item of Product or such earlier date on which the
first Borrowing is made with respect to such item of Product under a Special Production Tranche and
(B) in the case of an item of Product being acquired from a third party or through a co-production
which is not controlled by a Credit Party, five (5) days prior to payment by any Credit Party of
any portion of the cost of such item of Product (other than a down payment of 10% or less of the
Production Exposure for an item of Product), each of the following to the extent applicable (it
being understood that for purposes of clause (B) clause (1) below shall not be applicable):



                    (1) if requested by the Administrative Agent or the Group Lenders, the budget and cash flow
schedule for such item of Product,



                    (2) if requested by the Administrative Agent or the Group Lenders, a schedule identifying all
agreements executed in connection with such item of Product, which provide for deferments of
compensation or participations (as distinguished from residuals), in either case, payable by any
Credit Party from its share of revenues,



                    (3) copies of such of the foregoing agreements as the Administrative Agent or the Group
Lenders may reasonably request,



                    (4) certificates or binders of insurance with respect to such item of Product (and policies of
insurance if requested by the Administrative Agent and




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provided such policies are in the Credit Parties’ possession or are otherwise available to the
Credit Parties), including all forms of insurance coverage required by Section 5.5 hereof,




                    (5) copies of all instruments of transfer or other instruments (in recordable form)
(“Chain of Title” documents) necessary to establish, to the reasonable satisfaction of the
Administrative Agent, in the appropriate Credit Party ownership of sufficient rights under
copyright in the literary properties upon which such item of Product is to be based to enable such
Credit Party to produce and/or distribute such item of Product and to grant the Administrative
Agent the security interests therein which are contemplated by this Credit Agreement and the other
Fundamental Documents which Chain of Title documents shall evidence to the Administrative Agent’s
satisfaction the Credit Party’s rights in, and with respect to, such item of Product,



                    (6) evidence of the registration in the name of, or the transfer to, a Credit Party of the
copyright in the item of Product and/or the literary and other properties upon which the item of
Product is to be based (all as required by Section 5.8 hereof) and an executed Copyright Security
Agreement Supplement with respect to such item of Product or such literary and other properties (as
applicable), and



                    (7) in the case of: (a) an item of Product being produced by or under the control of any
Credit Party, to the extent not already covered by an existing Pledgeholder Agreement, executed
Pledgeholder Agreement(s) with respect to such item of Product; provided, however, that if a Credit
Party has granted a Lien in such item of Product to secure outside production financing in
accordance with Section 6.2(n) hereof, no Pledgeholder Agreement shall be required until such time
as the outside production financier has released such Lien; or (b) an item of Product being
acquired from a third party or through a co-production which is not controlled by a Credit Party,
to the extent not already covered by an existing Laboratory Access Letter, executed Laboratory
Access Letter(s) with respect to such item of Product.



     SECTION 5.21 Negative Cost Statements. If requested by the Administrative Agent, with
respect to each item of Product having a Production Exposure of U.S.$20,000,000 or more which is
produced by or under the control of any Credit Party, deliver to the Administrative Agent, within
thirty (30) days after each such item of Product is Completed (and after the last episode of the
season for a television series has been Completed), a tentative negative cost statement, and within
120 days after each such item of Product is Completed (and after the last episode of the season for
a television series has been Completed), a final negative cost statement.



     SECTION 5.22 Distribution Agreements, Acceptable L/C’s, Etc.



          (a) Deliver to the Administrative Agent to be held as part of the Collateral, promptly upon
receipt thereof, the originals of all Acceptable L/C’s (including any amendments thereto) which are
received by a Credit Party (whether pursuant to a Distribution Agreement or otherwise) after the
date hereof.




          (b) Furnish to the Administrative Agent quarterly (i) a list in the form of Schedule 3.17
hereto of all material Distribution Agreements executed during the preceding



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quarter and all material amendments to existing Distribution Agreements which amendments were
executed during the preceding quarter and (ii) copies of all Notices of Assignment and Irrevocable
Instructions (to the extent at the time required by Section 8.3 hereof) executed during the
preceding quarter.




          (c) From time to time (i) furnish to the Administrative Agent such information and reports
regarding the Distribution Agreements to which any Credit Party is a party as the Administrative
Agent may reasonably request and (ii) upon the occurrence and continuation of an Event of Default
and the reasonable request of the Administrative Agent, make to the other parties to a Distribution
Agreement to which any Credit Party is a party such demands and requests for information and
reports or for action as the Credit Party is entitled to make under each such Distribution
Agreement.




          (d) Take all action on its part to be performed necessary to effect timely payments under all
Acceptable L/C’s, including, without limitation, timely preparation, acquisition and presentation
of all documents, drafts or other instruments required to effect payment thereunder.




     SECTION 5.23 Completion Guaranty. Obtain a Completion Guaranty for any item of
Product (other than a television series) for which any Credit Party has a current financial
exposure (as opposed to a Negative Pick-up Obligation) or is otherwise subject to the economic risk
of Completion if the Production Exposure exceeds U.S.$20,000,000 for any such individual item of
Product or as otherwise required by the Administrative Agent in its discretion.



     SECTION 5.24 Security Agreements with the Guilds. Furnish to the Administrative Agent
duly executed copies of (i) each security agreement relating to an item of Product entered into by
a Credit Party with any guild and (ii) an intercreditor agreement (in form and substance
satisfactory to the Administrative Agent) from the applicable guild with respect to the security
interest and other rights granted to it pursuant to each such security agreement delivered to the
Administrative Agent pursuant to clause (i) above.



     SECTION 5.25 Excluded Beneficial Interests. Furnish to the Administrative Agent a
description of each Excluded Beneficial Interest acquired by the Credit Parties following the
Closing Date, no later than 180 days after the acquisition of such Excluded Beneficial Interests.



     SECTION 5.26 Post Closing Matters.



          (a) With respect to each item of Product listed on Schedule 3.8(a)(ii), furnish to the
Administrative Agent within thirty (30) days after the Closing Date, (i) either a new Laboratory
Pledgeholder Agreement or new Laboratory Access Letter (as applicable) or a supplement to an
existing Laboratory Pledgeholder Agreement or Laboratory Access Letter (as applicable) with respect
to each such item of Product, in each instance in form and substance satisfactory to the
Administrative Agent and together with a written confirmation from each Laboratory of all of the
Physical Materials in its possession and (ii) a list of the location of the best available Physical
Materials with respect to each such item of Product. The Administrative



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Agent may, in its sole discretion, waive the preceding requirements with respect to any
non-material item of Product.




          (b) As soon as practical after the Closing Date but in no event later than thirty (30) days
after the Closing Date, furnish to the Administrative Agent a certificate dated as of a recent date
as to the good standing of Artisan Filmed Productions Inc., Crash Television Productions, Cupid
Productions Inc., Landscape Entertainment Corp., Lions Gate Films. Inc. Mandate Films, LLC and
Screening Room, Inc. issued by the Secretary of State or other appropriate governmental official of
each jurisdiction in which such Credit Party is qualified as a foreign corporation or foreign
limited liability company.




6. NEGATIVE COVENANTS




          From the date hereof and for so long as the Commitments shall be in effect, any amount shall
remain outstanding under the Notes, or Letter of Credit shall remain outstanding or any monetary
Obligation then due and payable shall remain unpaid or unsatisfied, each Credit Party agrees that,
unless the Required Lenders shall otherwise consent in writing, it will not and will not allow any
of its Subsidiaries (other than the Unrestricted Subsidiaries or Inactive Subsidiaries) to:




     SECTION 6.1 Limitations on Indebtedness and Preferred Equity Interests. Incur,
create, assume or suffer to exist any preferred stock or preferred membership interest or
Indebtedness or permit any partnership or joint venture in which any Credit Party is a general
partner to incur, create, assume or suffer to exist any Indebtedness or preferred partnership
interest other than:



          (a) the Indebtedness represented by the Notes and the other Obligations;




          (b) Guaranties permitted pursuant to Section 6.3 hereof;




          (c) Indebtedness in respect of secured purchase money financing (or its Quebec equivalent),
including Capital Leases, to the extent permitted by Section 6.2(d) not to exceed U.S.$50,000,000
in the aggregate at any one time outstanding, plus up to U.S.$10,000,000 incurred solely to
finance the Fractional Aircraft Interest, plus the full amount
of any [REDACTED];




          (d) Indebtedness in respect of inter-company advances constituting Investments permitted under
Section 6.4(v);




          (e) existing Indebtedness listed on Schedule 6.1 hereto and all extensions, refinancing and
renewals thereof; provided that the principal amount of such Indebtedness is not



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increased and the terms thereof are not more onerous than the existing terms of the
Indebtedness being refinanced;




          (f) Indebtedness incurred by a Credit Party that is a Special Purpose Producer which is
non-recourse to any other Credit Party except to the extent of a Negative Pick-up Obligation,
Program Acquisition Guarantee or short-fall guarantee; provided, however that the
Borrowers may seek such outside production financing only if the Group Lenders have first been
offered, for a period of not less than 10 days from notice to the Administrative Agent of such
production financing, the opportunity to provide such financing and none of the Group Lenders shall
have agreed to provide such financing on market terms and provided, further that
the applicable Credit Party shall provide the Administrative Agent a description of the terms of
such production financing within a reasonable time after entering into such production financing;




          (g) liabilities relating to profit participations, deferments and guild residuals arising in
the ordinary course of business in connection with the production or acquisition of Product;




          (h) Subordinated Debt;




          (i) unsecured liabilities for acquisitions of rights or Product incurred in the ordinary
course of business (including co-productions, co-ventures and other co-financing arrangements),
which are not otherwise prohibited hereunder;




          (j) Indebtedness of a Person which becomes a Subsidiary of LGEC after the Closing Date
provided (i) such Indebtedness existed at the time the Person became a Subsidiary and was not
created in anticipation of the acquisition of such Person, (ii) immediately after giving effect to
the acquisition of such Person by a Credit Party, no Default or Event of Default shall have
occurred and be continuing and (iii) such Indebtedness is non-recourse to the Borrowers or any
other Credit Party (other than such Person);




          (k) Permitted Preferred Stock;




          (l) Indebtedness incurred by SlateCo in connection with the Permitted Slate Financing;




          (m) Replication Advances not to exceed $100,000,000 in the aggregate at any one time
outstanding, which may be secured on a subordinated basis and which are otherwise on terms and
conditions acceptable to the Administrative Agent in its discretion, or bridge financing related
thereto;




          (n) Indebtedness secured solely by liens on Acceptable Tax Credits which is non-recourse to
any Credit Party other than customary representations and warranties pursuant to documentation
satisfactory to the Administrative Agent;




          (o) other Indebtedness not to exceed U.S.$20,000,000 in the aggregate at any one time
outstanding; and




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          (p) Indebtedness pursuant to the Pennsylvania Regional Financing Arrangement in an amount no
greater than U.S.$66,000,000.




     SECTION 6.2 Limitations on Liens. Incur, create, assume or suffer to exist any Lien
on any of the Collateral, whether now owned or hereafter acquired, except:



          (a) the Liens of the Administrative Agent (for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders) under this Credit Agreement, the other Fundamental Documents and any
other document contemplated hereby or thereby;




          (b) Liens to secure any Subordinated Debt on terms and conditions satisfactory to the
Administrative Agent;




          (c) existing Liens listed on Schedule 6.2 hereof;




          (d) Liens granted to the vendor or Person financing the acquisition or improvement of
property, plant or equipment or other property acquired or improved by a Credit Party if, in each
case, (i) the Lien is limited to the particular assets acquired or improved; (ii) except in the
case of [REDACTED], the Indebtedness secured by the Lien
does not exceed the cost of acquiring and improvising the particular assets for which the Lien is
granted, (iii) the Indebtedness in respect of which such Lien is granted is permitted by Section
6.1(c) hereof and (iv) such transaction does not otherwise violate this Credit Agreement;




          (e) Liens pursuant to written security agreements (in form and substance acceptable to the
Administrative Agent) in favor of guilds or unions which are required pursuant to collective
bargaining agreements; provided, however, that either (i) each such guild has
entered into an intercreditor agreement with the Administrative Agent reasonably satisfactory to
the Administrative Agent in all respects or (ii) the Administrative Agent has perfected its
security interest in the applicable Credit Party’s rights in the item of Product to which such
Liens relate prior to any guilds or unions perfecting its security interest and the Borrowers have
used their best efforts to obtain an intercreditor agreement;




          (f) Liens (on terms satisfactory to the Administrative Agent) to secure distribution,
exhibition and/or exploitation rights of licensees pursuant to Distribution Agreements or of
licensors from whom any Credit Party has obtained any distribution rights or other exploitation
rights to any item of Product or Liens to secure production advances on an item of Product;




          (g) Liens to secure deposits under worker’s compensation, unemployment insurance, old-age
pensions, social security and similar laws or to secure statutory obligations or surety, appeal,
performance or other similar bonds incurred in the ordinary course of business (other than
completion guaranties) or to secure performance as lessee under leases of real or personal property
and other obligations of a like nature, in each case incurred in the ordinary course of business;




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          (h) Liens customarily granted or incurred in the ordinary course of business with regard to
services rendered by laboratories and post-production houses, record warehouses and suppliers of
materials and equipment which secure outstanding trade payables;




          (i) Liens arising out of attachments, judgments or awards as to which an appeal or other
appropriate proceedings for contest or review are timely commenced (and as to which foreclosure and
other enforcement proceedings shall not have been commenced (unless fully bonded or otherwise
effectively stayed)) and as to which appropriate reserves have been established in accordance with
GAAP;




          (j) Liens for taxes, assessments or other governmental charges or levies (i) not yet due or
(ii) due and payable, the validity or amount of which is currently being contested in good faith by
appropriate proceedings pursuant to the terms of Section 5.13 hereof;




          (k) possessory Liens (other than those of laboratories and production houses) which (i) occur
in the ordinary course of business, (ii) secure normal trade debt which is not yet due and payable
and (iii) do not secure Indebtedness;




          (l) customary Liens in favor of Approved Completion Guarantors granted in connection with
Completion Guaranties;




          (m) Liens arising by virtue of any statutory or common law provision relating to banker’s
liens, rights of setoff or similar rights with respect to deposit accounts of the Credit Parties;




          (n) Liens granted by a Credit Party that is a Special Purpose Producer to secure outside
production financing otherwise permitted hereunder;




          (o) Liens on the property or assets of a Person which becomes a Subsidiary of a Credit Party
after the Closing Date securing Indebtedness permitted under Section 6.1 hereof provided that (i)
such Liens existed at the time such Person became a Subsidiary and were not created in anticipation
of the acquisition of such Person, (ii) any such Lien does not by its terms cover any property or
assets after the time such Person becomes a Subsidiary which were not covered immediately prior
thereto, and (iii) any such Lien does not by its terms secure any Indebtedness other than
Indebtedness existing immediately prior to the time such Person becomes a Subsidiary;




          (p) reversion or turnaround rights with respect to a project in development provided,
that any such right terminates by the date on which the Credit Parties must comply with Section
5.20 hereof with respect to the item of Product to be based, in whole or in part, on such
development project;




          (q) easements, servitudes, rights of way, restrictions, minor defects or irregularities in
title and other similar encumbrances on real property which do not materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of business of the
Credit Parties;




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          (r) Liens granted by SlateCo to secure its obligations in connection with the Permitted Slate
Financing;




          (s) Liens to secure Replication Advances permitted by Section 6.1(m) on terms and conditions
satisfactory to the Administrative Agent;




          (t) Intentionally Omitted;




          (u) Liens on Acceptable Tax Credits to secure Indebtedness permitted by Section 6.1(n) hereof;




          (v) Liens granted by either MQP, any Services Company that is a Credit Party, LGF or Lions
Gate Television Inc. to secure MQP’s obligations to SGF pursuant to the SGF Co-Financing
Arrangement;




          (w) Liens granted by Lions Gate Films Inc. to secure its payment and performance obligations
to (i) FilmCo in connection with the LGFF Slate Transaction and (ii) SlateCo in connection with the
Permitted Slate Financing;




          (x) Liens to secure payment and performance obligations of a Credit Party in connection with a
revenue participation purchase agreement or similar arrangement for third-party investments in
Product produced, acquired or distributed by such Credit Party; provided, however,
that each such revenue participation or other investment arrangement exceeding U.S.$20,000,000 is
on terms satisfactory to the Administrative Agent;




          (y) Liens granted by one or more of the Credit Parties to secure LGPA’s and its subsidiaries’
obligations to PA Lender pursuant to the Pennsylvania Regional Financing Arrangement; and




          (z) other Liens securing other Indebtedness not to exceed U.S.$20,000,000 in the aggregate at
any one time outstanding.




     SECTION 6.3 Limitation on Guarantees. Provide any Guaranty, either directly or
indirectly, except (i) Negative Pickup Obligations and minimum guarantees to acquire items
of Product in the ordinary course of business to the extent otherwise permitted under this Credit
Agreement, (ii) Guarantees of the obligations of Special Purpose Producers under talent agreements
for the provision of services related to the production of items of Product, provided that such
obligations are included within the Credit Party’s Production Exposure for each such item of
Product, (iii) Guarantees to the Administrative Agent, the Issuing Bank and the Lenders in
accordance with Article 9 hereof, (iv) existing Guarantees listed on Schedule 6.3 hereto, (v)
Guarantees by one Credit Party of the obligations of another Credit Party to the extent otherwise
permitted hereunder, including short-fall guarantees in connection with outside production
financing permitted pursuant to Section 6.1(f) hereof, (vi) subordinated guarantees of Replication
Advances permitted hereunder, (vii) guarantees of the obligations of Mandate Pictures LLC and its
subsidiaries (collectively, “Mandate”) in an aggregate amount not to exceed, together with
Investments in Mandate permitted pursuant to Section 6.4(xx) hereof, U.S.$50,000,000 at any one
time outstanding; (viii) guarantees of obligations of the [REDACTED] in respect of [REDACTED]
pursuant to Section 6.1(c); (ix) LGEC’s guarantee of the obligations of LGEI



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pursuant to the Convertible Senior Subordinated Notes and pursuant to the Share Purchase
Agreement among Redbus Group Limited, Redbus Distribution, LGEI and LGEC, dated as of October 17,
2005; (x) other guarantees not to exceed U.S.$10,000,000 in the aggregate outstanding at any one
time and (xi) Guarantees of the obligations of Special Purpose Producers under collective
bargaining agreements with guilds and/or unions relating to the provision of services related to
the production of items of Product.



     SECTION 6.4 Limitations on Investments. Create, make or incur any Investment other
than (i) as part of the Special Production Tranche, (ii) to acquire Product in the ordinary course
of business, (iii) nominal investments in Special Purpose Producers, (iv) purchase of Cash
Equivalents, (v) inter-company advances among Credit Parties (provided that the aggregate amount of
inter-company advances made in reliance on this clause (v) by Credit Parties which are not
Controlled Foreign Subsidiaries to Credit Parties which are Controlled Foreign Subsidiaries shall
not exceed U.S.$20,000,000 at any one time outstanding), (vi) Investments as of the Closing Date
set forth on Schedule 6.4, (vii) Guarantees permitted pursuant to Section 6.3, (viii) equity
Investments of any Credit Party in its existing Subsidiaries that are Credit Parties (other than
any Controlled Foreign Subsidiary) and the creation of and Investments in new Subsidiaries in
accordance with the provisions hereof, (ix) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers, customers or other debtors or in
settlement of delinquent obligations arising in the ordinary course of business, (x) loans or
advances to employees in the ordinary course of business (such as travel advances), (xi) promissory
notes or other debt obligations received in connection with asset dispositions permitted hereunder,
(xii) Investments in connection with co-productions, co-ventures, and other co-financing
arrangements otherwise permissible hereunder, (xiii) loans or other advances to officers or
employees of the Credit Parties for the purpose of purchasing Equity Interests in the Credit
Parties in an amount not to exceed U.S.$1,000,000 in the aggregate, (xiv) Investments made by
issuing new capital stock or by using the proceeds of such newly issued capital stock within a
reasonable period following the issuance of such capital stock, (xv) the purchase of call options
to hedge the Borrowers’ exposure in connection with the issuance of the Convertible Senior
Subordinated Notes which call options are to be settled on a net basis, (xvi) Investments of up to
U.S.$50,000,000 in the aggregate in a limited partnership or limited liability company sponsored
and/or managed by a Credit Party for the purpose of acquiring, administering and licensing music
and publishing rights, (xvii) loans made by MQP to Services Companies in connection with any tax
credits pursuant to the SGF Co-Financing Arrangement, (xviii) loans made by LGEI to NextPoint, Inc.
in an amount at any time no greater than U.S.$10,000,000, (xix) other Investments after the Closing
Date (including (A) Investments in Unrestricted Subsidiaries other than Mandate and the [REDACTED]
and (B) inter-company advances and other Investments by Credit Parties which are not Controlled
Foreign Subsidiaries to Credit Parties which are Controlled Foreign Subsidiaries which are not
otherwise permitted by any other clause of this Section 6.4) in an amount, which together with all
permitted payments under Section 6.5(vii) hereof, shall not exceed, in the aggregate, the sum of
25% of Eligible Library Amount plus 50% of the Net Cash Proceeds from the issuance of any new
Equity Interests (other than Equity Interests used to make any Investment pursuant to clause (xiv)
of this Section 6.4) or convertible Indebtedness issued after the Closing Date and within the
preceding 12 months period (provided that no Default or Event of Default shall be continuing after
giving effect on a pro forma basis to any such Investment), (xx) Investments in Mandate in an
aggregate amount not to exceed, together with any guarantees of obligations of Mandate permitted
under



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Section 6.3 (vii), U.S.$50,000,000
at any one time outstanding, (xxi) with respect to [REDACTED], (xxii) investment in the [REDACTED] not
to exceed U.S.$40,000,000 (exclusive of any guarantee permitted hereunder), and (xxiii) the
contribution by LGEI and/or the other Credit Parties to SlateCo of receivables due or to become due
from [REDACTED] or a replacement of any such party not to exceed a face amount of U.S.$150,000,000.



     SECTION 6.5 Restricted Payments. Pay or declare or enter into any agreement to pay or
otherwise become obligated to make any Restricted Payment, other than (i) Restricted Payments
payable solely in additional shares of common stock of LGEC, (ii) conversion of Permitted Preferred
Stock into common stock of LGEC, (iii) dividends on Permitted Preferred Stock, (iv) payments (a)
for the repurchase, redemption, acquisition, cancellation or other retirement for value of the
Equity Interests of LGEC held by former managers and employees of a Credit Party or its
Subsidiaries (or their estates or beneficiaries under their estates) upon the death, disability,
retirement or termination of employment of any such former managers or former employees, (b) to
terminate options to purchase stock of LGEC owned by former managers and employees of a Credit
Party or its Subsidiaries (or their estate or beneficiaries under their estates) upon the death,
disability, retirement or termination of employment of any such former manager or former employee
of such Credit Party or its Subsidiaries or (c) on promissory notes or other obligations
representing the unpaid repurchase, redemption, acquisition or cancellation price for Equity
Interests of LGEC owned by such former managers and employees of such Credit Party and its
Subsidiaries, in an amount not to exceed at any time U.S.$1,000,000 in the aggregate for (a), (b)
and (c), but, in each case, only if no Default or Event of Default is in existence or would be
caused thereby, (v) payments to a Credit Party by another Credit Party, (vi) payments to the
Borrowers from any other Credit Party, (vii) dividends, stock buy-backs and redemptions and
repurchase of Subordinated Debt in an amount which, together with all Investments previously made
under Section 6.4(xix) hereof shall not exceed, in the aggregate, the sum of 25% of the Eligible
Library Amount plus 50% of the Net Cash Proceeds from the issuance of any new Equity
Interests (other than Equity Interests used to make any Investment pursuant to clause (xiv) of
Section 6.4) or convertible Indebtedness issued after the Closing Date and within the preceding 12
months period (provided that no Default or Event of Default shall be continuing after giving effect
on a pro forma basis to any such transaction), (viii) payments but not prepayments of interest and
principal on the Convertible Senior Subordinated Notes on the terms set forth in the applicable
documents and that no Default or Event of Default shall be continuing after giving effect on a pro
forma basis to such payments, (ix) repayment of any Replication Advance by way of application of a
specified portion of the per unit replication or processing charges or by reason of the Credit
Parties’ failure to fulfill minimum replication commitments as specified in the governing terms and
conditions as approved in accordance with Section 6.1(m) hereof, (x) repayment of a Replication
Advance with proceeds of another Replication Advance obtained in accordance with Section 6.1(m)
hereof, and (xi) payments for the purchase of call options to hedge the Borrowers’ exposure in
connection with the issuance of the Convertible Senior Subordinated Notes which call options are to
be settled on a net basis.



     SECTION 6.6 Intentionally Omitted.



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     SECTION 6.7 Consolidation, Merger, Sale or Purchase of Assets, etc.



          (a) Whether in one transaction or a series of transactions, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation, or sell or otherwise dispose of
any item of Product, or any capital stock of any Subsidiary or any of its other property, stock or
assets or agree to do or suffer any of the foregoing, except for: (i) the merger by any solvent
Guarantor (other than the Borrowers) into or the transfer of all of its assets to the Borrowers or
another Guarantor if after such merger no Default or Event of Default exists; (ii) licenses for the
distribution, exhibition or other exploitation of Product pursuant to Distribution Agreements
entered into in the ordinary course of business; (iii) outright sales of Product within the
ordinary course of business (i.e. no library sales); (iv) outright sales of non-film assets sold
for not less than fair market value; (v) outright sales of Product outside of the ordinary course
of business (including library sales) if sold for not less than fair market value and not in excess
of $20,000,000 in the aggregate; (vi) sales or other dispositions of equipment in the ordinary
course of business which are obsolete or no longer useful in the operation of the businesses of the
Borrowers or their Subsidiaries; (vii) the sale of Product to FilmCo as part of the LGFF Slate
Transaction, (viii) the sale of Product to SlateCo as part of the Permitted Slate Financing, (ix)
the sale of membership interests in FilmCo to LGEI and Pride Pictures LLC as part of the LGFF Slate
Transaction, (x) the sale of revenue participations in Product to SGF as part of the SGF
Co-Financing Arrangement and (xi) the sale of any asset by one Credit Party to another Credit
Party.




          (b) Enter into any Acquisition, unless (i) immediately after giving effect to such Acquisition
the aggregate outstanding Loans and Letters of Credit are less than 75% of the Borrowing Base (for
the purposes of such calculation, the Borrowers shall be entitled to treat all receivables of such
newly acquired Person as Eligible Receivables, provided that such Person and the subsidiaries of
such Person to whom such receivables are owed become Credit Parties immediately following such
Acquisition and such receivables satisfy all other criteria set forth in the definition of
“Eligible Receivables”), (ii) such Acquisitions are within the scope of permitted business
activities set forth in Section 6.13 hereof and (iii) no Default or Event of Default shall be
continuing after giving effect on a pro forma basis to any such Acquisition.




     SECTION 6.8 Receivables. Sell, discount or otherwise dispose of notes, accounts
receivable or other obligations owing to any Credit Party except for the purpose of collection in
the ordinary course of business.



     SECTION 6.9 Sale and Leaseback. Enter into any arrangement with any Person or
Persons, whereby in contemporaneous transactions any Credit Party sells essentially all of its
right, title and interest in an item of Product and acquires or licenses the right to distribute or
exploit such item of Product in media and markets accounting for substantially all the value of
such item of Product, other than any such arrangement involving an item of Product which does not
impair the collateral position of the Administrative Agent, the Issuing Bank and the Group Lenders
and is evidenced by documentation acceptable to the Administrative Agent.



     SECTION 6.10 Places of Business; Change of Name. Change the location of its chief
executive office or principal place of business or any of the locations where it keeps any portion
of the Collateral or its books and records with respect to the Collateral or change its



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name without in each case (i) giving the Administrative Agent ten (10) days written notice
following such change and (ii) filing any additional Uniform Commercial Code financing statements,
and such other documents requested by the Administrative Agent to maintain perfection of the
security interest of the Administrative Agent for the benefit of the Administrative Agent, the
Issuing Bank and the Group Lenders in the Collateral.



     SECTION 6.11 Limitations on Capital Expenditures. Make, or incur any obligation to
make, Capital Expenditures (excluding expenditures to produce or acquire items of Product or
Capital Expenditures of a potential merger or acquisition target made prior to such acquisition or
merger) for all Credit Parties and their Subsidiaries in excess of (x) U.S.$10,000,000 for any
fiscal year which to the extent unused may be carried over to subsequent fiscal years and (y)
U.S.$30,000,000 in the aggregate from and after the Closing Date.



     SECTION 6.12 Transactions with Affiliates. Enter into any transaction with any of its
Affiliates other than (i) any transaction which is solely among Credit Parties (provided that for
purposes of this Section 6.12, neither SlateCo nor any Controlled Foreign Subsidiary shall be
considered to be Credit Parties), (ii) the transactions contemplated by the LGFF Slate Transaction
and the Permitted Slate Financing, (iii) the sale of revenue participation interests in Product to
LGEI as part of the SGF Co-Financing Arrangement and (iv) transactions that occur in the ordinary
course of business on an arm’s-length basis (and if involving more than U.S.$500,000, is
specifically approved by adoption of a resolution approving each such transaction adopted by the
Board of Directors of LGEC).



     SECTION 6.13 Business Activities. Engage in any business activities other than (i)
the development, production, distribution or acquisition of intellectual properties including
feature films, television, interactive media, music and video product and/or rights therein or
thereto, (ii) operation of physical production facilities, (iii) acquisition and operation of
television channels and internet distribution platforms, (iv) other entertainment and media-related
business activities that involve aggregate expenditures of no more than U.S.$10,000,000 from and
after the Closing Date, (v) [REDACTED] and (vi) making
an Investment in other Persons engaged in any of the business activities set forth in
clauses (i) through (v) of this Section 6.13.



     SECTION 6.14 Fiscal Year End. Change its fiscal year end to other than March 31, in
each year other than on 30 days prior written notice to the Administrative Agent, to June 30,
September 30 or December 31, as LGEI may decide (provided; however, that LGEI shall not delay the
delivery of the financial statements and reports required to be delivered under Section 5.1 hereof
by changing its fiscal year).



     SECTION 6.15 Intentionally Omitted



     SECTION 6.16 Intentionally Omitted



     SECTION 6.17 Intentionally Omitted.



     SECTION 6.18 Intentionally Omitted



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     SECTION 6.19 Liquidity Ratio. Permit the ratio (the “Liquidity Ratio”) of (i)
all projected known cash sources (including cash on hand and borrowings under the Credit Agreement
(taking into account projected Borrowing Base availability), cash receipts from operations and
overhead reimbursements) to (ii) all projected known cash uses (including debt service, amounts to
be spent to acquire film inventory, print and advertising expenses, overhead, and all other cash
expenditures), all as determined as of each quarter end and as projected in good faith for the
ensuing 12 months, to be less than 1.1 to 1.



     SECTION 6.20 Fixed Charges Coverage Ratio. Permit the ratio (the “Fixed Charges
Coverage Ratio”), determined as of the end of each rolling four-quarter period, of (i) Library
Revenue to (ii) the sum of Total Interest (excluding non-cash interest expense) plus
dividends actually paid (other than dividends consisting of shares of common stock in LGEC or
Permitted Preferred Stock) plus all required payments of principal (other than payments to
Cinerenta GmbH or its affiliates in connection with films produced by Cinerenta GmbH or its
affiliates for the Borrowers or their Subsidiaries as distributor) plus capital
expenditures [REDACTED] plus overhead, to be below 1.5 to 1
beginning with the period ending September 30, 2008 and the end of each period thereafter.



     SECTION 6.21 Film Spending Ratio. Permit the ratio (the “Film Spending
Ratio”) of (i) the sum of all revenue (to be determined on an ultimate basis) payable to a
Credit Party and attributable to items of Product in their first exploitation cycle and that have
print and advertising expenses of at least U.S.$2,000,000 to (ii) the aggregate negative cost and
print and advertising expenses attributable to such items of Product and incurred by a Credit Party
(other than financing charges and overhead charges), all as determined on a rolling basis for the
last twelve (12) Completed items of Product which have completed their initial theatrical
exhibition cycle, to be less than 1 to 1.



     SECTION 6.22 Prohibitions of Amendments and Waivers. Amend, alter, modify, terminate
or waive, or consent to any amendment, alteration, modification or waiver of the terms of any
Permitted Preferred Stock or any material agreement to which any Credit Party is a party in any
material respect or in any manner adverse to the Group Lenders.



     SECTION 6.23 Amortization Method. Permit the method of amortization of
film\television inventory currently used to be changed unless required under GAAP.



     SECTION 6.24 No Further Negative Pledge. Except with respect to prohibitions against
other encumbrances on specific property encumbered to secure payment of particular Indebtedness
(which Indebtedness relates solely to such specific property, and improvements and accretions
thereto, and is otherwise permitted hereby), enter into any agreement (other than this Agreement,
the Fundamental Documents and the existing Indebtedness listed on Schedule 6.1 and any refinancings
thereof permitted pursuant to Section 6.1), (i) prohibiting the creation or assumption of any Lien
to secure the payment of the Indebtedness and Obligations hereunder and any Indebtedness or
obligation incurred in connection with the refinancing of the Indebtedness hereunder, upon the
properties or assets of the Borrowers or any of their Subsidiaries (other than the Unrestricted
Subsidiaries), whether now owned or hereafter acquired or (ii) requiring an obligation to be
secured if obligations under



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this Agreement (or any obligation incurred in connection with the refinancing of any
obligation hereunder) are secured.



     SECTION 6.25 Intentionally Omitted.



     SECTION 6.26 Intentionally Omitted.



     SECTION 6.27 Bank Accounts. After the date hereof, open or maintain any bank account
other than (a) accounts maintained at any of the Group Lenders, (b) accounts maintained at
financial institutions approved by the Administrative Agent and listed on Schedule 6.27 or (c) a
Production Account, as to which the Administrative Agent shall have received notice.



     SECTION 6.28 ERISA Compliance. Engage in a “prohibited transaction”, as defined in
Section 406 of ERISA or Section 4975 of the Code, with respect to any U.S. Plan or Multiemployer
Plan or knowingly consent to any other “party in interest” or any “disqualified person”, as such
terms are defined in Section 3(14) or ERISA and Section 4975(e)(2) of the Code, respectively,
engaging in any “prohibited transaction”, with respect to any U.S. Plan or Multiemployer Plan; or
permit any U.S. Plan to incur any “accumulated funding deficiency”, as defined in Section 302 of
ERISA or Section 412 of the Code, unless such incurrence shall have been waived in advance by the
Internal Revenue Service; or terminate any U.S. Plan subject to Title IV of ERISA in a manner which
could result in the imposition of a Lien on any property of any Credit Party pursuant to Section
4068 of ERISA; or breach or knowingly permit any employee or officer or any trustee or
administrator of any U.S. Plan to breach any fiduciary responsibility imposed under Title I of
ERISA with respect to any U.S. Plan; engage in any transaction which would result in the incurrence
of a liability under Section 4069 of ERISA; or fail to make contributions to a U.S. Plan or
Multiemployer Plan which could result in the imposition of a Lien on any property of any Credit
Party pursuant to Section 302(f) of ERISA or Section 412(n) of the Code, if the occurrence of any
of the foregoing events (alone or in the aggregate) would result in a liability which has a
Material Adverse Effect.



     SECTION 6.29 Hazardous Materials. Cause or permit any of its properties or assets to
be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer,
produce or process Hazardous Materials, except in compliance in all material respects with all
applicable Environmental Laws, nor release, discharge, dispose of or permit or suffer any release
or disposal as a result of any intentional act or omission on its part of Hazardous Materials onto
any such property or asset in violation of any Environmental Law.



     SECTION 6.30 Use of Proceeds of Loans and Requests for Letters of Credit. Use the
proceeds of Loans or request any Letter of Credit hereunder other than for the purposes set forth
in, and as required by, Section 5.19 hereof.



     SECTION 6.31 Interest Rate Protection Agreements, etc. Enter into any Interest Rate
Protection Agreement or Currency Agreement for other than bona fide hedging purposes.



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7. EVENTS OF DEFAULT




          In the case of the happening and during the continuance of any of the following events (herein
called “Events of Default”):




          (a) any representation or warranty made by a Credit Party in this Credit Agreement or any
other Fundamental Document to which it is a party or any statement or representation made by a
Credit Party in any report, financial statement, certificate or other document furnished to the
Administrative Agent or any Group Lender pursuant to this Credit Agreement or any other Fundamental
Document, shall prove to have been false or misleading in any material respect when made or
delivered;




          (b) default shall be made in the payment of principal of the Notes as and when due and
payable, whether by reason of maturity, mandatory prepayment, acceleration or otherwise;




          (c) default shall be made in the payment of interest on the Notes, Commitment Fees or other
monetary Obligations, when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise and such
default shall continue unremedied for five (5) Business Days;




          (d) default shall be made in the due observance or performance of any covenant, condition or
agreement contained in Sections 5.4 or 5.19 or Article 6 of this Agreement;




          (e) failure to submit any financial statements and reports as required pursuant to Section 5.1
hereof, including the Borrowing Base Certificate, to the Administrative Agent within ten (10)
Business Days of the date such statement or report was due pursuant to the terms of this Credit
Agreement; provided, however, that a failure to deliver a Borrowing Base
Certificate when due shall not constitute an Event of Default if and for so long as there are no
Loans or Letters of Credit outstanding.




          (f) default shall be made by any Credit Party in the due observance or performance of any
other covenant, condition or agreement to be observed or performed pursuant to the terms of this
Credit Agreement or any other Fundamental Document, and such default shall continue unremedied for
thirty (30) days after the applicable Credit Party receives notice or obtains knowledge of such
occurrence;




          (g) default shall be made with respect to any payment of any Indebtedness of any Credit Party
in excess of U.S.$15,000,000 in the aggregate (other than the Obligations) when due, or in the
performance of any other obligation incurred in connection with any such Indebtedness if the effect
of such non-payment default is to accelerate the maturity of such Indebtedness or to permit the
holder thereof to cause such Indebtedness to become due prior to its stated maturity and such
default shall not be remedied, cured, waived or consented to within the period of grace with
respect thereto; provided, however, that in the case of a default in connection
with Indebtedness incurred by a Credit Party that is a Special Purpose Producer, there




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shall be no Event of Default hereunder unless such default continues unremedied for ten (10)
business days;




          (h) any Credit Party shall generally not pay its debts as they become due or shall admit in
writing its inability to pay its debts, or shall make a general assignment for the benefit of
creditors; or any Credit Party shall commence any case, proceeding or other action seeking to have
an order for relief entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent
or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it
or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors
or seeking appointment of a receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its property or shall file an answer or other pleading in any such
case, proceeding or other action admitting the material allegations of any petition, complaint or
similar pleading filed against it or consenting to the relief sought therein; or any Credit Party
shall take any action to authorize, or in contemplation of, any of the foregoing;




          (i) any involuntary case, proceeding or other action against any Credit Party shall be
commenced seeking to have an order for relief entered against it as debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution
or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its property, and such case, proceeding or
other action (i) results in the entry of any order for relief against it or (ii) shall remain
undismissed for a period of sixty (60) days;




          (j) final judgment(s) for the payment of money in excess of U.S.$5,000,000 in the aggregate
shall be rendered against any Credit Party and within thirty (30) days from the entry of such
judgment shall not have been paid or otherwise discharged or stayed pending appeal or shall not
have been discharged within thirty (30) days from the entry of a final order of affirmance on
appeal;




          (k) (i) failure by any Credit Party or ERISA Affiliate to make any contributions required to
be made to a U.S. Plan subject to Title IV of ERISA or Multiemployer Plan, (ii) any accumulated
funding deficiency (within the meaning of Section 4971 of the Code) shall exist with respect to any
U.S. Plan (whether or not waived), (iii) the present value of all benefits under all U.S. Plans
subject to Title IV of ERISA (based on those assumptions used to fund such U.S. Plans) exceeds, in
the aggregate, as of the last annual valuation date applicable thereto, the actuarial value of the
assets of such U.S. Plans allocable to such benefits, (iv) any Credit Party or ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal
liability to such Multiemployer Plan, or that a Multiemployer Plan is in reorganization or is being
terminated, (v) a Reportable Event with respect to a U.S. Plan shall have occurred, (vi) the
withdrawal by any Credit Party or ERISA Affiliate from a U.S. Plan during a plan year in which it
was a substantial employer (within the meaning of section 4001(a)(2) or 4062(e) of ERISA), (vii)
the termination of a U.S. Plan subject to Title IV of ERISA, or the filing of a notice of intent to
terminate a U.S. Plan under section 4041(c) of ERISA, (viii) the institution of proceedings to
terminate, or the appointment of a trustee with respect to, a U.S. Plan subject to Title IV of
ERISA by the PBGC, (ix) any other event or condition which could constitute grounds under section
4042(a) of ERISA for the termination of,



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or the appointment of a trustee to administer, any U.S. Plan subject to Title IV of ERISA, or
(x) the imposition of a Lien pursuant to section 412 of the Code or section 302 of ERISA as to any
Credit Party or ERISA Affiliate;




          (l) this Credit Agreement, the Copyright Security Agreement, any Copyright Security Agreement
Supplement, the Trademark Security Agreement, any Trademark Security Agreement Supplement or any
Hypothec (each a “Security Document”) shall, for any reason, not be or shall cease to be in
full force and effect or shall be declared null and void or any of the Security Documents shall not
give or shall cease to give the Administrative Agent the material Liens, rights, powers and
privileges purported to be created thereby in favor of the Administrative Agent for the benefit of
the Administrative Agent, the Issuing Bank and the Group Lenders, superior to and prior to the
rights of all third Persons and subject to no other Liens (other than Permitted Encumbrances), or
the validity or enforceability of the Liens granted, to be granted, or purported to be granted, by
any of the Security Documents shall be contested by any Credit Party or any of their respective
Affiliates, provided that no such defect in the Security Documents shall give rise to an
Event of Default under this paragraph (l) unless such defect shall affect Collateral that is or
should be subject to a Lien in favor of the Administrative Agent having an aggregate value in
excess of U.S.$100,000;




          (m) Intentionally Omitted;




          (n) a Change in Management shall occur;




          (o) a Change in Control shall occur; or




          (p) the occurrence of any “Designated Event” as defined in any of the indentures issued in
connection with the Convertible Senior Subordinated Notes.



then, in every such event and at any time thereafter during the continuance of such event, the
Administrative Agent may, or if directed by the Required Lenders, shall, take any or all of the
following actions, at the same or different times: (x) terminate forthwith the Commitments, (y)
declare the principal of and the interest on the Loans and the Notes and all other amounts payable
hereunder or thereunder to be forthwith due and payable, whereupon the same shall become and be
forthwith due and payable, without presentment, demand, protest, notice of acceleration or other
notice of any kind, all of which are hereby expressly waived, anything in this Credit Agreement or
in the Notes to the contrary notwithstanding and/or (z) require the Borrowers to deliver to the
Administrative Agent, respectively, from time to time, Cash Equivalents in an amount equal to the
full amount of L/C Exposure or to furnish other security therefor acceptable to the Required
Lenders. If an Event of Default specified in paragraph (h) or (i) above shall have occurred, the
Commitments shall automatically terminate and the principal of, and interest on, the Loans and the
Notes and all other amounts payable hereunder and thereunder shall automatically become due and
payable without presentment, demand, protest, or other notice of any kind, all of which are hereby
expressly waived, anything in this Credit Agreement or the Notes to the contrary notwithstanding.
Such remedies shall be in addition to any other remedy available to the Administrative Agent, the
Issuing Bank or the Group Lenders pursuant to Applicable Law or otherwise.




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8. GRANT OF SECURITY INTEREST; REMEDIES




     SECTION 8.1 Security Interests. Each of the Borrowers, as security for the due and
punctual payment of the Obligations (including interest accruing on and after the filing of any
petition in bankruptcy or of reorganization of any Borrower whether or not post filing interest is
allowed in such proceeding) and each of the Guarantors, as security for its obligations under
Article 9 hereof, hereby mortgages, pledges, assigns, transfers, sets over, conveys and delivers to
the Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank and the
Lenders) and grants to the Administrative Agent (for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders) a security interest in the Collateral.



     SECTION 8.2 Use of Collateral. So long as no Event of Default shall have occurred and
be continuing, and subject to the various provisions of this Credit Agreement and the other
Fundamental Documents, a Credit Party may use the Collateral in any lawful manner except as
otherwise provided hereunder.



     SECTION 8.3 Collection Accounts. The Credit Parties will continue to maintain one or
more bank accounts (each, a “Collection Account”) with any of the Lenders and will direct,
by Notice of Assignment and Irrevocable Instructions, all Persons (other than theatrical
exhibitors) who become licensees, buyers or account debtors under receivables with respect to any
item of Product included in the Collateral to make payments under or in connection with the license
agreements, sales agreements or receivables directly to the appropriate lockbox or Collection
Account. So long as no Event of Default is continuing, the Borrowers shall have the right to
withdraw any funds from time to time on deposit in the Collection Accounts. Upon agreement between
the Administrative Agent and the Credit Parties, a Collection Account maintained at the
Administrative Agent may also serve as the Cash Collateral Account, provided that such
Collection Account is under the sole dominion and control of the Administrative Agent.



          (a) The Credit Parties will execute such documentation as may be reasonably required by the
Administrative Agent in order to effectuate the provisions of this Section 8.3.




          (b) In the event a Credit Party receives payment from any Person or proceeds under an
Acceptable L/C, which payment should have been remitted directly to the appropriate lockbox or
Collection Account, such Credit Party shall promptly remit such payment or proceeds to the
appropriate Collection Account to be applied in accordance with the terms of this Credit Agreement.




     SECTION 8.4 Credit Parties to Hold in Trust. Upon the occurrence and during the
continuance of an Event of Default, each of the Credit Parties will, upon receipt by it of any
revenue, income, profits or other sums in which a security interest is granted by this Article 8,
payable pursuant to any agreement or otherwise, or of any check, draft, note, trade acceptance or
other instrument evidencing an obligation to pay any such sum, hold the sum or instrument in trust
for the Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders),
segregate such sum or instrument from their own assets and forthwith, without any notice, demand or
other action whatsoever (all notices, demands, or other actions on the part of the Administrative
Agent, the Issuing Bank or the Lenders being expressly waived), endorse,



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transfer and deliver any such sums or instruments or both, to the Administrative Agent to be
applied to the repayment of the Obligations in accordance with the provisions of Section 8.7
hereof.



     SECTION 8.5 Collections, etc. Upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent may, in its sole discretion, in its name (on behalf of
the Administrative Agent, the Issuing Bank and the Lenders) or in the name of any Credit Party or
otherwise, demand, sue for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for, or make any compromise or settlement deemed desirable
with respect to, any of the Collateral, but shall be under no obligation so to do, or the
Administrative Agent may extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, or release, any of the Collateral, without thereby incurring
responsibility to, or discharging or otherwise affecting any liability of, any Credit Party. The
Administrative Agent will not be required to take any steps to preserve any rights against prior
parties to the Collateral. If any Credit Party fails to make any payment or take any action
required hereunder, the Administrative Agent may make such payments and take all such actions as
the Administrative Agent reasonably deems necessary to protect the Administrative Agent’s (on
behalf of the Administrative Agent, the Issuing Bank and the Lenders) security interests in the
Collateral and/or the value thereof, and the Administrative Agent is hereby authorized (without
limiting the general nature of the authority herein above conferred) to pay, purchase, contest or
compromise any Liens that in the judgment of the Administrative Agent appear to be equal to, prior
to or superior to the security interests of the Administrative Agent (on behalf of the
Administrative Agent, the Issuing Bank and the Lenders) in the Collateral (other than Permitted
Encumbrances) and any Liens not expressly permitted by this Credit Agreement.



     SECTION 8.6 Possession, Sale of Collateral, etc. Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent may enter upon the premises of any
Credit Party or wherever the Collateral may be, and take possession of the Collateral, and may
demand and receive such possession from any Person who has possession thereof, and the
Administrative Agent may take such measures as it deems necessary or proper for the care or
protection thereof, including the right to remove all or any portion of the Collateral, and with or
without taking such possession may sell or cause to be sold, whenever the Administrative Agent,
shall decide, in one or more sales or parcels, at such prices as the Administrative Agent may deem
appropriate, and for cash or on credit or for future delivery, without assumption of any credit
risk, all or any portion of the Collateral, at any broker’s board or at public or private sale,
without demand of performance but with 10 days’ written notice to the Credit Parties of the time
and place of any such public sale or sales (which notice the Credit Parties hereby agree is
reasonable) and with such other notices as may be required by Applicable Law and cannot be waived,
and none of the Administrative Agent, the Issuing Bank nor any of the Lenders shall have any
liability should the proceeds resulting from a private sale be less than the proceeds realizable
from a public sale, and the Administrative Agent, the Issuing Bank, the Lenders or any other Person
may be the purchaser of all or any portion of the Collateral so sold and thereafter hold the same
absolutely, free (to the fullest extent permitted by Applicable Law) from any claim or right of
whatever kind, including any equity of redemption, of any Credit Party, any such demand, notice,
claim, right or equity being hereby expressly waived and released. At any sale or sales made
pursuant to this Article 8, the Administrative Agent, the



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Issuing Bank and the Lenders may bid for or purchase, free (to the fullest extent permitted by
Applicable Law) from any claim or right of whatever kind, including any equity of redemption, of
any Credit Party, any such demand, notice, claim, right or equity being hereby expressly waived and
released, any part of or all of the Collateral offered for sale, and may make any payment on
account thereof by using any claim for moneys then due and payable to the Administrative Agent, the
Issuing Bank and the Lenders by any Credit Party hereunder as a credit against the purchase price.
The Administrative Agent shall in any such sale make no representations or warranties with respect
to the Collateral or any part thereof, and none of the Administrative Agent, the Issuing Bank nor
any of the Lenders shall be chargeable with any of the obligations or liabilities of any Credit
Party. Each Credit Party hereby agrees (i) that it will indemnify and hold the Administrative
Agent, the Issuing Bank and the Lenders harmless from and against any and all claims with respect
to the Collateral asserted before the taking of actual possession or control of the relevant
Collateral by the Administrative Agent pursuant to this Article 8, or arising out of any act of, or
omission to act on the part of, any Person (other than the Administrative Agent, the Issuing Bank
or Lenders) prior to such taking of actual possession or control by the Administrative Agent
(whether asserted before or after such taking of possession or control), or arising out of any act
on the part of any Credit Party or its Affiliates or agents before or after the commencement of
such actual possession or control by the Administrative Agent; and (ii) none of the Administrative
Agent, the Issuing Bank nor any of the Lenders shall have any liability or obligation to any Credit
Party arising out of any such claim except for acts of willful misconduct or gross negligence.
Subject only to the lawful rights of third parties, any laboratory which has possession of any of
the Collateral is hereby constituted and appointed by the Credit Parties as pledgeholder for the
Administrative Agent (for the benefit of itself, the Issuing Bank and the Lenders), and, upon the
occurrence of an Event of Default, each such pledgeholder is hereby authorized (to the fullest
extent permitted by Applicable Law) to sell all or any portion of the Collateral upon the order and
direction of the Administrative Agent and each Credit Party hereby waives any and all claims, for
damages or otherwise, for any action taken by such pledgeholder in accordance with the terms of the
UCC not otherwise waived hereunder. In any action hereunder, the Administrative Agent shall be
entitled if permitted by Applicable Law to the appointment of a receiver without notice, to take
possession of all or any portion of the Collateral and to exercise such powers as the court shall
confer upon the receiver. Notwithstanding the foregoing, upon the occurrence of an Event of
Default, and during the continuation of such Event of Default, the Administrative Agent, the
Issuing Bank and the Lenders shall be entitled to apply, without prior notice to any of the Credit
Parties, any cash or cash items constituting Collateral in the possession of the Administrative
Agent, the Issuing Bank and the Lenders to payment of the Obligations.



     SECTION 8.7 Application of Proceeds on Default. Upon the occurrence and during the
continuance of an Event of Default, the balances in the Clearing Account, the Collection
Account(s), the Cash Collateral Account(s) or in any other account of any Credit Party with a
Lender, all other income on the Collateral, and all proceeds from any sale of the Collateral
pursuant hereto shall be applied first toward payment of the reasonable out-of-pocket costs and
expenses paid or incurred by the Administrative Agent in enforcing this Credit Agreement, in
realizing on or protecting any Collateral and in enforcing or collecting any Obligations or any
Guaranty thereof, including, without limitation, court costs and the reasonable attorney’s fees and
expenses incurred by the Administrative Agent, then to satisfy or provide cash collateral for all
Obligations relating to the Letters of Credit, and then to the indefeasible



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payment in full of the Obligations in accordance with Section 12.2(b) hereof;
provided, however, that, the Administrative Agent may in its discretion and with
the consent of the Required Lenders (and PA Lender, if the funds constitute proceeds of the Film
Library), apply funds comprising the Collateral to pay the cost (i) of completing any item of
Product owned in whole or in part by any Credit Party in any stage of production and (ii) of making
delivery to the distributors of such item of Product. Any amounts remaining after such
indefeasible payment in full shall be remitted to the appropriate Credit Party or as a court of
competent jurisdiction may otherwise direct.



     SECTION 8.8 Power of Attorney. Each Credit Party does hereby irrevocably (a) make,
constitute and appoint the Administrative Agent or any of its officers or designees its true and
lawful attorney-in-fact with full power in the name of the Administrative Agent, such other Person
or such Credit Party, upon the occurrence and during the continuance of an Event of Default which
is not waived in writing by the Required Lenders, to receive, open and dispose of all mail
addressed to any Credit Party, and to endorse any notes, checks, drafts, money orders or other
evidences of payment relating to the Collateral that may come into the possession of the
Administrative Agent with full power and right to cause the mail of such Persons to be transferred
to the Administrative Agent’s own offices or otherwise, and to do any and all other acts necessary
or proper to carry out the intent of this Credit Agreement and the grant of the security interests
hereunder and under the Fundamental Documents, and each Credit Party hereby ratifies and confirms
all that the Administrative Agent or its substitutes shall properly do by virtue hereof; (b) make,
constitute and appoint the Administrative Agent or any of its officers or designees its true and
lawful attorney-in-fact in the name of the Administrative Agent or any Credit Party, upon the
occurrence and during the continuance of an Event of Default which is not waived in writing by the
Required Lenders, (i) to enforce all of such Credit Party’s rights under and pursuant to all
agreements with respect to the Collateral, all for the sole benefit of the Administrative Agent for
the benefit of the Administrative Agent, the Issuing Bank and the Lenders and to enter into such
other agreements as may be necessary or appropriate in the judgment of the Administrative Agent to
complete the production, distribution or exploitation of any item of Product which is included in
the Collateral, (ii) to enter into and perform such agreements as may be necessary in order to
carry out the terms, covenants and conditions of the Fundamental Documents that are required to be
observed or performed by any Credit Party, (iii) to execute such other and further mortgages,
pledges and assignments of the Collateral, and related instruments or agreements, as the
Administrative Agent may reasonably require for the purpose of perfecting, protecting, maintaining
or enforcing the security interests granted to the Administrative Agent for the benefit of the
Administrative Agent, the Issuing Bank and the Lenders hereunder and under the other Fundamental
Documents, and (iv) to do any and all other things necessary or proper to carry out the intention
of this Credit Agreement and the grant of the security interests hereunder and under the other
Fundamental Documents. Each of the Credit Parties hereby ratifies and confirms in advance all that
the Administrative Agent as such attorney-in-fact or its substitutes shall properly do by virtue of
this power of attorney.



     SECTION 8.9 Financing Statements, Direct Payments. Each Credit Party hereby
authorizes the Administrative Agent to file UCC and PPSA financing statements and any amendments
thereto or continuations thereof, any Copyright Security Agreement, any Copyright Security
Agreement Supplement, any Trademark Security Agreement, any Trademark Security Agreement
Supplement, any Hypothec and any other appropriate security documents or



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instruments and to give any notices necessary or desirable to perfect the Lien of the
Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders on the Collateral,
in all cases without the signature of any Credit Party or to execute such items as attorney-in-fact
for any Credit Party; provided, that the Administrative Agent shall provide copies of any
such documents or instruments to the Borrowers. Each Credit Party further authorizes the
Administrative Agent to notify any account debtors that all sums payable to any Credit Party
relating to the Collateral shall be paid directly to the Administrative Agent.



     SECTION 8.10 Further Assurances. Upon the request of the Administrative Agent, each
Credit Party hereby agrees to duly and promptly execute and deliver, or cause to be duly executed
and delivered, at the cost and expense of the Credit Parties, such further instruments as may be
necessary or proper, in the reasonable judgment of the Administrative Agent, to carry out the
provisions and purposes of this Article 8 or to perfect and preserve the Liens of the
Administrative Agent for the benefit of itself, the Issuing Bank and the Lenders hereunder and
under the Fundamental Documents, in the Collateral or any portion thereof.



     SECTION 8.11 Termination and Release. The security interests granted under this
Article 8 shall terminate when all Obligations have been indefeasibly fully paid and performed and
the Commitments shall have terminated and all Letters of Credit shall have expired or been
terminated or canceled. Upon request by the Credit Parties (and at the sole expense of the Credit
Parties) after such termination, the Administrative Agent will take all reasonable action and do
all things reasonably necessary, including, without limitation, executing UCC termination
statements, Pledgeholder Agreement terminations, termination letters to account debtors and
copyright releases, to terminate the security interest granted to it (for the benefit of the
Administrative Agent, the Issuing Bank and the Lenders) hereunder.



     SECTION 8.12 Remedies Not Exclusive. The remedies conferred upon or reserved to the
Administrative Agent in this Article 8 are intended to be in addition to, and not in limitation of,
any other remedy or remedies available to the Administrative Agent. Without limiting the
generality of the foregoing, the Administrative Agent, the Issuing Bank and the Lenders shall have
all rights and remedies of a secured creditor under Article 9 of the UCC and under any other
Applicable Law.



     SECTION 8.13 Quiet Enjoyment. The Administrative Agent, the Issuing Bank and the
Lenders acknowledge and agree that their security interest hereunder is subject to the rights of
Quiet Enjoyment (as defined below) of parties (which are not Affiliates of any Credit Party) to
Distribution Agreements, whether existing on the date hereof or hereafter executed. For the
purpose hereof, “Quiet Enjoyment” shall mean in connection with the rights of a licensee
(which is not an Affiliate of any Credit Party) under a Distribution Agreement, the Administrative
Agent, the Issuing Bank and the Lenders’ agreement that their rights under this Credit Agreement
and the other Fundamental Documents and in the Collateral are subject to the rights of such
licensee to distribute, exhibit and/or to exploit the item of Product licensed to them under such
Distribution Agreement, and to receive prints or tapes or have access to preprint material or
master tapes in connection therewith and that even if the Lenders shall become the owner of the
Collateral in case of an Event of Default, the Lenders’ ownership rights shall be subject to the
rights of said parties under such agreement, provided, however, that no default
under the relevant Distribution Agreement shall be continuing which would entitle the licensor to



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terminate such Distribution Agreement. The Administrative Agent agrees that, upon the
reasonable request of a Credit Party, it will provide written confirmation (in form reasonably
acceptable to the Administrative Agent) of such rights of Quiet Enjoyment to licensees under the
Distribution Agreements. None of the foregoing constitutes an agreement by the Administrative
Agent, the Issuing Bank or the Lenders to the granting of any security interest to any Person under
any Distribution Agreement, except as otherwise permitted pursuant to Section 6.2.



     SECTION 8.14 Continuation and Reinstatement. Each Credit Party further agrees that
the security interest granted hereunder shall continue to be effective or be reinstated, as the
case may be, if at any time payment or any part thereof of any Obligation is rescinded or must
otherwise be restored by the Administrative Agent, the Issuing Bank or the Lenders upon the
bankruptcy or reorganization of any Credit Party or otherwise.



9. GUARANTY




     SECTION 9.1 Guaranty. (a) Each Guarantor unconditionally and irrevocably guarantees
to the Administrative Agent, the Issuing Bank and the Lenders the due and punctual payment by, and
performance of, the Obligations (including interest accruing on and after the filing of any
petition in bankruptcy or of reorganization of the obligor whether or not post filing interest is
allowed in such proceeding). Each Guarantor further agrees that the Obligations may be increased,
extended or renewed, in whole or in part, without notice or further assent from it (except as may
be otherwise required herein), and it will remain bound upon this Guaranty notwithstanding any
extension or renewal of any Obligation.



          (b) Each Guarantor waives presentation to, demand for payment from and protest to, as the case
may be, any Credit Party or any other guarantor of any of the Obligations, and also waives notice
of protest for nonpayment, notice of acceleration and notice of intent to accelerate. The
obligations of each Guarantor hereunder shall not be affected by (i) the failure of the
Administrative Agent, the Issuing Bank or the Lenders to assert any claim or demand or to enforce
any right or remedy against any Borrower or any Guarantor or any other guarantor under the
provisions of this Credit Agreement or any other agreement or otherwise; (ii) any extension or
renewal of any provision hereof or thereof; (iii) the failure of the Administrative Agent, the
Issuing Bank or the Lenders to obtain the consent of the Guarantor with respect to any rescission,
waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of
this Credit Agreement, the Notes or of any other agreement; (iv) the release, exchange, waiver or
foreclosure of any security held by the Administrative Agent for the Obligations or any of them;
(v) the failure of the Administrative Agent, the Issuing Bank or the Lenders to exercise any right
or remedy against any other Guarantor or any other guarantor of the Obligations; (vi) any
bankruptcy, reorganization, liquidation, dissolution or receivership proceeding or case by or
against either Borrower or other Credit Party, any change in the corporate existence, structure,
ownership or control of either Borrower or other Credit Party (including any of the foregoing
arising from any merger, consolidation, amalgamation, reorganization or similar transaction); or
(vii) the release or substitution of any Guarantor or any other guarantor of the Obligations.
Without limiting the generality of the foregoing or any other provision hereof (including, without
limitation, Section 13.6 hereof), to the extent permitted by applicable law, each Guarantor hereby



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expressly waives any and all benefits which might otherwise be available to it under
California Civil Code Sections 2799, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845,
2848, 2849, 2850, 2899 and 3433.




          (c) Each Guarantor further agrees that this Guaranty is a continuing guaranty, shall secure
the Obligations and any ultimate balance thereof, notwithstanding that the Borrowers or others may
from time to time satisfy the Obligations in whole or in part and thereafter incur further
Obligations, and that this Guaranty constitutes a guaranty of performance and of payment when due
and not just of collection, and waives any right to require that any resort be had by the
Administrative Agent, the Issuing Bank or any Lender to any security held for payment of the
Obligations or to any balance of any deposit, account or credit on the books of the Administrative
Agent, the Issuing Bank or any Lender in favor of any Borrower or any Guarantor, or to any other
Person.




          (d) Each Guarantor hereby expressly assumes all responsibilities to remain informed of the
financial condition of the Borrowers, the Guarantors and any other guarantors of the Obligations
and any circumstances affecting the Collateral or the Pledged Securities or the ability of the
Borrowers to perform under this Credit Agreement.




          (e) Each Guarantor’s obligations under the Guaranty shall not be affected by the genuineness,
validity, regularity or enforceability of the Obligations, the Notes or any other instrument
evidencing any Obligations, or by the existence, validity, enforceability, perfection, or extent of
any collateral therefor or by any other circumstance relating to the Obligations which might
otherwise constitute a defense to this Guaranty. The Administrative Agent, the Issuing Bank and
the Lenders make no representation or warranty with respect to any such circumstances and have no
duty or responsibility whatsoever to any Guarantor in respect to the management and maintenance of
the Obligations or any collateral security for the Obligations.




     SECTION 9.2 No Impairment of Guaranty, etc. The obligations of each Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or termination for any
reason (except payment and performance in full of the Obligations), including, without limitation,
any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of
the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent, the Issuing Bank or any Lender to
assert any claim or demand or to enforce any remedy under this Credit Agreement or any other
agreement, by any waiver or modification of any provision hereof or thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in any manner or to
any extent vary the risk of such Guarantor or would otherwise operate as a discharge of such
Guarantor as a matter of law, unless and until the Obligations are paid in full, the Commitments
have terminated and each outstanding Letter of Credit has expired or otherwise been terminated.



     SECTION 9.3 Continuation and Reinstatement, etc.



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          (a) Each Guarantor further agrees that its guaranty hereunder shall continue to be effective
or be reinstated, as the case may be, if at any time payment, or any part thereof, of any
Obligation is rescinded or must otherwise be restored by the Administrative Agent, the Issuing Bank
or the Lenders upon the bankruptcy or reorganization of a Borrower or a Guarantor, or otherwise.
In furtherance of the provisions of this Article 9, and not in limitation of any other right which
the Administrative Agent, the Issuing Bank or the Lenders may have at law or in equity against a
Borrower, a Guarantor or any other Person by virtue hereof, upon failure of the Borrowers to pay
any Obligation when and as the same shall become due, whether at maturity, by acceleration, after
notice or otherwise, each Guarantor hereby promises to and will, upon receipt of written demand by
the Administrative Agent on behalf of itself, the Issuing Bank and/or the Lenders, forthwith pay or
cause to be paid to the Administrative Agent for the benefit of itself, the Issuing Bank and/or the
Lenders (as applicable) in cash an amount equal to the unpaid amount of all the Obligations with
interest thereon at a rate of interest equal to the rate specified in Section 2.10 hereof, and
thereupon the Administrative Agent shall assign such Obligation, together with all security
interests, if any, then held by the Administrative Agent in respect of such Obligation, to the
Guarantors making such payment; such assignment to be subordinate and junior to the rights of the
Administrative Agent on behalf of itself, the Issuing Bank and the Lenders with regard to amounts
payable by the Borrowers in connection with the remaining unpaid Obligations and to be pro tanto to
the extent to which the Obligation in question was discharged by the Guarantor or Guarantors making
such payments.




          (b) All rights of a Guarantor against the Borrowers, arising as a result of the payment by
such Guarantor of any sums to the Administrative Agent for the benefit of the Administrative Agent,
the Issuing Bank and/or the Lenders or directly to the Lenders hereunder by way of right of
subrogation or otherwise, shall in all respects be subordinated and junior in right of payment to,
and shall not be exercised by such Guarantor until and unless, the prior final and indefeasible
payment in full of all the Obligations. If any amount shall be paid to such Guarantor for the
account of the Borrowers, such amount shall be held in trust for the benefit of the Administrative
Agent, segregated from such Guarantor’s own assets, and shall forthwith be paid to the
Administrative Agent on behalf of the Administrative Agent, the Issuing Bank and/or the Lenders to
be credited and applied to the Obligations, whether matured or unmatured.




     SECTION 9.4 Limitation on Guaranteed Amount etc. (a) Notwithstanding any other
provision of this Article 9, the amount guaranteed by each Guarantor hereunder shall be limited to
the extent, if any, required so that its obligations under this Article 9 shall not be subject to
avoidance under Section 548 of the Bankruptcy Code or to being set aside or annulled under any
Applicable Law relating to fraud on creditors. In determining the limitations, if any, on the
amount of any Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the
intention of the parties hereto that any rights of subrogation or contribution which such Guarantor
may have under this Article 9, any other agreement or Applicable Law shall be taken into account.



          (b) Notwithstanding anything to the contrary contained herein, the Guaranty from any Credit
Party that is a direct Subsidiary of LGEC and is incorporated under the Canada Business
Corporations Act shall be deemed to be a Guaranty of the Obligations of LGEC.



     SECTION 9.5 Voluntary Arrangements.



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          (a) Without prejudice to the Administrative Agent’s, the Issuing Bank’s and the Lenders’
rights to recover such sums under the guaranty and indemnity under Section 9.1, on the approval of
any company voluntary arrangement in respect of any Borrower (or the implementation of any
compromise or scheme of arrangement or any analogous procedure to any of the foregoing in any other
jurisdiction) under which a Borrower’s obligations to the Administrative Agent, the Issuing Bank
and the Lenders are compromised in any way, each Guarantor shall as principal obligor be liable to
the Administrative Agent, the Issuing Bank and the Lenders for, and hereby undertakes to the
Administrative Agent, the Issuing Bank and the Lenders (as a separate and additional covenant)
immediately on demand from time to time to pay to the Administrative Agent, the Issuing Bank and
the Lenders, amounts equal to the sums that would have been payable to the Administrative Agent,
the Issuing Bank and the Lenders by any Borrower, or any guarantor of any Borrower, had such
compromise not occurred, and so that payment shall be made by a Guarantor to the Administrative
Agent, the Issuing Bank and the Lenders under this Section in the amounts and at the times at which
but for the said compromise a Borrower would have been obliged to make payment to the
Administrative Agent, the Issuing Bank and the Lenders. Each Guarantor’s liability under Section
9.1 and this Section shall not be affected in any way by the Administrative Agent, the Issuing Bank
and the Lenders voting in favor of (if the Administrative Agent, the Issuing Bank and the Lenders
chooses to do so) of any company voluntary arrangement, compromise, scheme of arrangement or
analogous procedure proposed by or in respect of any Borrower.




          (b) If and to the extent that any right is or may be held by a Guarantor as against any
Borrower, the existence or exercise of which may affect the right or ability of the Administrative
Agent, the Issuing Bank and the Lenders to obtain the full benefit of this guaranty and indemnity
from a Guarantor if a company voluntary arrangement, compromise, scheme of arrangement or analogous
procedure proposed by or in respect of any Borrower is approved, each Guarantor hereby waives such
right. In the event of any inconsistency between this Section and any other provision of the
Credit Agreement this Section shall prevail.




10. PLEDGE




     SECTION 10.1 Pledge. Each Pledgor, as security for the due and punctual payment of
the Obligations (including interest accruing on and after the filing of any petition in bankruptcy
or of reorganization of a Borrower whether or not post filing interest is allowed in such
proceeding) in the case of the Borrowers and as security for its obligations under Article 9 hereof
in the case of a Pledgor which is a Guarantor, hereby pledges, hypothecates, assigns, transfers,
sets over and delivers unto the Administrative Agent for the benefit of itself, the Issuing Bank
and the Group Lenders, a security interest in all Pledged Collateral now owned or hereafter
acquired by it. On the Closing Date, the Pledgors shall deliver to the Administrative Agent the
definitive instruments (if any) representing all Pledged Securities, accompanied by undated stock
powers, duly endorsed or executed in blank by the appropriate Pledgor, and such other instruments
or documents as the Administrative Agent or its counsel shall reasonably request.



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     SECTION 10.2 Covenant. Each Pledgor covenants that as a stockholder of each of its
respective Subsidiaries it will not take any action to allow any additional shares of common stock,
preferred stock or other equity securities of any of its respective Subsidiaries or any securities
convertible or exchangeable into common or preferred stock of such Subsidiaries to be issued, or
grant any options or warrants, unless such securities are pledged to the Administrative Agent (for
the benefit of itself, the Issuing Bank and the Group Lenders) as security for the Obligations.



     SECTION 10.3 Registration in Nominee Name; Denominations. The Administrative Agent
shall have the right (in its sole and absolute discretion) to hold the certificates representing
any Pledged Securities (a) in its own name (on behalf of the Administrative Agent, the Issuing Bank
and the Group Lenders) or in the name of its nominee or (b) in the name of the appropriate Pledgor,
endorsed or assigned in blank or in favor of the Administrative Agent. The Administrative Agent
shall have the right to exchange the certificates representing any of the Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with this Credit
Agreement.



     SECTION 10.4 Voting Rights; Dividends; etc. (a) The appropriate Pledgor shall be
entitled to exercise any and all voting and/or consensual rights and powers accruing to an owner of
the Pledged Securities being pledged by it hereunder or any part thereof for any purpose not
inconsistent with the terms hereof, at all times, except as expressly provided in paragraph (c)
below.



          (a) All dividends or distributions of any kind whatsoever (other than cash dividends or
distributions paid while no Event of Default is continuing) received by a Pledgor, whether
resulting from a subdivision, combination, or reclassification of the outstanding capital stock of
the issuer or received in exchange for Pledged Securities or any part thereof or as a result of any
merger, consolidation, acquisition, or other exchange of assets to which the issuer may be a party,
or otherwise, shall be and become part of the Pledged Securities pledged hereunder and shall
immediately be delivered to the Administrative Agent to be held subject to the terms hereof. All
dividends and distributions which are received contrary to the provisions of this subsection (b)
shall be received in trust for the benefit of the Administrative Agent, the Issuing Bank and the
Group Lenders, segregated from such Pledgor’s own assets, and shall be delivered to the
Administrative Agent.




          (b) Upon the occurrence and during the continuance of an Event of Default and notice from the
Administrative Agent of the transfer of such rights to the Administrative Agent, all rights of a
Pledgor (i) to exercise the voting and/or consensual rights and powers which it is entitled to
exercise pursuant to this Section and (ii) to receive and retain cash dividends and distributions
shall cease, and all such rights shall thereupon become vested in the Administrative Agent, which
shall have the sole and exclusive right and authority to exercise such voting and/or consensual
rights and receive such cash dividends and distributions until such time as such Event of Default
has been cured.




     SECTION 10.5 Remedies Upon Default. If an Event of Default shall have occurred and be
continuing, the Administrative Agent, on behalf of itself, the Issuing Bank and the Group Lenders,
may sell the Pledged Securities, or any part thereof, at public or private sale



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or at any broker’s board or on any securities exchange, for cash, upon credit or for future
delivery as the Administrative Agent shall deem appropriate subject to the terms hereof or as
otherwise provided in the UCC. The Administrative Agent shall be authorized at any such sale (if
it deems it advisable to do so) to restrict to the full extent permitted by Applicable Law the
prospective bidders or purchasers to Persons who will represent and agree that they are purchasing
the Pledged Securities for their own account for investment and not with a view to the distribution
or sale thereof, and upon consummation of any such sale, the Administrative Agent shall have the
right to assign, transfer, and deliver to the purchaser or purchasers thereof the Pledged
Securities so sold. Each such purchaser at any such sale shall hold the property sold absolutely,
free from any claim or right on the part of any Pledgor. The Administrative Agent shall give the
Pledgors ten (10) days’ written notice of any such public or private sale, or sale at any broker’s
board or on any such securities exchange, or of any other disposition of the Pledged Securities.
Such notice, in the case of public sale, shall state the time and place for such sale and, in the
case of sale at a broker’s board or on a securities exchange, shall state the board or exchange at
which such sale is to be made and the day on which the Pledged Securities, or portion thereof, will
first be offered for sale at such board or exchange. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the Administrative
Agent may fix and shall state in the notice of such sale. At any such sale, the Pledged
Securities, or portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Administrative Agent may (in its sole and absolute discretion) determine. The
Administrative Agent shall not be obligated to make any sale of the Pledged Securities if it shall
determine not to do so, regardless of the fact that notice of sale of the Pledged Securities may
have been given. The Administrative Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the time and place to
which the same was so adjourned. In case the sale of all or any part of the Pledged Securities is
made on credit or for future delivery, the Pledged Securities so sold shall be retained by the
Administrative Agent until the sale price is paid by the purchaser or purchasers thereof, but the
Administrative Agent shall not incur any liability in case any such purchaser or purchasers shall
fail to take up and pay for the Pledged Securities so sold and, in case of any such failure, such
Pledged Securities may be sold again upon like notice. At any sale or sales made pursuant to this
Section 10.5, the Administrative Agent (on behalf of itself, the Issuing Bank and/or the Group
Lenders) may bid for or purchase, free from any claim or right of whatever kind, including any
equity of redemption, of the Pledgors, any such demand, notice, claim, right or equity being hereby
expressly waived and released, any or all of the Pledged Securities offered for sale, and may make
any payment on the account thereof by using any claim for moneys then due and payable to the
Administrative Agent, the Issuing Bank (to the extent it consents) or any consenting Group Lender
by any Credit Party as a credit against the purchase price; and the Administrative Agent upon
compliance with the terms of sale, may hold, retain and dispose of the Pledged Securities without
further accountability therefor to any Pledgor or any third party (other than the Issuing Bank
and/or the Group Lenders). The Administrative Agent shall in any such sale make no representations
or warranties with respect to the Pledged Securities or any part thereof, and shall not be
chargeable with any of the obligations or liabilities of the Pledgors with respect thereto. Each
Pledgor hereby agrees (i) it will indemnify and hold the Administrative Agent, the Issuing Bank and
the Group Lenders harmless from and against any and all claims with respect to the Pledged
Securities asserted before the taking of



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actual possession or control of the Pledged Securities by the Administrative Agent pursuant to
this Credit Agreement, or arising out of any act of, or omission to act on the part of, any Person
prior to such taking of actual possession or control by the Administrative Agent (whether asserted
before or after such taking of possession or control), or arising out of any act on the part of any
Pledgor, its agents or Affiliates before or after the commencement of such actual possession or
control by the Administrative Agent and (ii) the Administrative Agent, the Issuing Bank and the
Group Lenders shall have no liability or obligation arising out of any such claim. As an
alternative to exercising the power of sale herein conferred upon it, the Administrative Agent may
proceed by a suit or suits at law or in equity to foreclose upon the Collateral and Pledged
Securities under this Credit Agreement and to sell the Pledged Securities, or any portion thereof,
pursuant to a judgment or decree of a court or courts having competent jurisdiction.



     SECTION 10.6 Application of Proceeds of Sale and Cash. The proceeds of sale of the
Pledged Securities sold pursuant to Section 10.5 hereof shall be applied by the Administrative
Agent on behalf of itself, the Issuing Bank and the Group Lenders as follows:



               (i) to the payment of all reasonable out-of-pocket costs and expenses paid or incurred by the
Administrative Agent in connection with such sale, including, without limitation, all court costs
and the reasonable fees and expenses of counsel for the Administrative Agent in connection
therewith, and the payment of all reasonable out-of-pocket costs and expenses paid or incurred by
the Administrative Agent in enforcing this Credit Agreement, in realizing or protecting any
Collateral and in enforcing or collecting any Obligations or any Guaranty thereof, including,
without limitation, court costs and the reasonable attorney’s fees and expenses incurred by the
Administrative Agent in connection therewith;



               (ii) to satisfy or provide cash collateral for all Obligations relating to the Letters of
Credit; and



               (iii) to the indefeasible payment in full of the Obligations in accordance with Section
12.2(b) hereof;


provided, however, that the Administrative Agent may in its discretion apply funds
comprising the Collateral to pay the cost (i) of completing any item of Product owned in whole or
in part by any Credit Party in any stage of production and (ii) of making delivery to the
distributors of such item of Product. Any amounts remaining after such indefeasible payment in
full shall be remitted to the appropriate Pledgor, or as a court of competent jurisdiction may
otherwise direct.




     SECTION 10.7 Securities Act, etc. In view of the position of each Pledgor in relation
to the Pledged Securities pledged by it, or because of other present or future circumstances, a
question may arise under the Securities Act of 1933, as amended, as now or hereafter in effect, or
any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being hereinafter called the “Federal Securities
Laws”), with respect to any disposition of the Pledged Securities permitted hereunder. Each
Pledgor understands that compliance with the Federal Securities Laws may very strictly limit the
course of conduct of the Administrative Agent if the Administrative Agent were to attempt to
dispose of all or any part of the Pledged Securities, and may also limit the extent to which or the
manner in which any subsequent transferee of any Pledged Securities may



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dispose of the same. Similarly, there may be other legal restrictions or limitations
affecting the Administrative Agent in any attempt to dispose of all or any part of the Pledged
Securities under applicable Blue Sky or other state securities laws, or similar laws analogous in
purpose or effect. Under Applicable Law, in the absence of an agreement to the contrary, the
Administrative Agent may perhaps be held to have certain general duties and obligations to a
Pledgor to make some effort towards obtaining a fair price even though the Obligations may be
discharged or reduced by the proceeds of a sale at a lesser price. Each Pledgor waives to the
fullest extent permitted by Applicable Law any such general duty or obligation to it, and the
Pledgors and/or the Credit Parties will not attempt to hold the Administrative Agent responsible
for selling all or any part of the Pledged Securities at an inadequate price, even if the
Administrative Agent shall accept the first offer received or does not approach more than one
possible purchaser. Without limiting the generality of the foregoing, the provisions of this
Section 10.7 would apply if, for example, the Administrative Agent were to place all or any part of
the Pledged Securities for private placement by an investment banking firm, or if such investment
banking firm purchased all or any part of the Pledged Securities for its own account, or if the
Administrative Agent placed all or any part of the Pledged Securities privately with a purchaser or
purchasers.



     SECTION 10.8 Continuation and Reinstatement. Each Pledgor further agrees that its
pledge hereunder shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by
the Administrative Agent, the Issuing Bank or the Group Lenders upon the bankruptcy or
reorganization of any Pledgor or otherwise.



     SECTION 10.9 Termination. The pledge referenced herein shall terminate when all
Obligations shall have been indefeasibly fully paid and performed and the Commitments shall have
terminated, and all L/C Exposure shall have expired or been terminated or canceled, at which time
the Administrative Agent shall assign and deliver to the appropriate Pledgor, or to such Person or
Persons as such Pledgor shall designate, against receipt, such of the Pledged Securities (if any)
as shall not have been sold or otherwise applied by the Administrative Agent pursuant to the terms
hereof and shall still be held by it hereunder, together with appropriate instruments of
reassignment and release. Any such reassignment shall be free and clear of all Liens, arising by,
under or through the Administrative Agent but shall otherwise be without recourse upon or warranty
by the Administrative Agent and at the expense of the Pledgors.



11. CASH COLLATERAL




     SECTION 11.1 Cash Collateral Accounts. On or prior to the Closing Date, there shall
be established with the Administrative Agent, a collateral account (the “Cash Collateral
Account”), into which the appropriate Credit Parties shall from time to time deposit U.S.
Dollars and except to the extent otherwise provided in this Article 11, the Cash Collateral
Accounts shall be under the sole dominion and control of the Administrative Agent.



     SECTION 11.2 Investment of Funds. (a) The Administrative Agent is hereby authorized
and directed to invest and reinvest the funds from time to time transferred or



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deposited into the Cash Collateral Accounts, so long as no Event of Default has occurred and
is continuing, on the instructions of the Borrowers (provided that any such instructions given
verbally shall be confirmed promptly in writing) or, if the Borrowers shall fail to give such
instructions upon delivery of any such funds, in the sole discretion of the Administrative Agent,
provided that in no event may the Borrowers give instructions to the Administrative Agent
to, or may the Administrative Agent in its discretion, invest or reinvest funds in the Cash
Collateral Accounts in other than Cash Equivalents.



          (b) Any net income or gain on the investment of funds from time to time held in the Cash
Collateral Accounts, shall be promptly reinvested by the Administrative Agent, as applicable, as a
part of the applicable Cash Collateral Account; and any net loss on any such investment shall be
charged against the applicable Cash Collateral Account.




          (c) None of the Administrative Agent, the Issuing Bank and the Group Lenders shall be a
trustee for any of the Credit Parties, or shall have any obligations or responsibilities, or shall
be liable for anything done or not done, in connection with the Cash Collateral Accounts, except as
expressly provided herein. The Administrative Agent, the Issuing Bank and the Group Lenders shall
not have any obligation or responsibility and shall not be liable in any way for any investment
decision made in accordance with this Section 11.2 or for any decrease in the value of the
investments held in the Cash Collateral Account.




     SECTION 11.3 Grant of Security Interest. For value received and to induce the Issuing
Bank to issue Letters of Credit and the Group Lenders to make Loans to the Borrowers and to acquire
participations in Letters of Credit from time to time as provided for in this Credit Agreement, as
security for the payment of all of the Obligations, each of the Credit Parties hereby assigns to
the Administrative Agent (for the benefit of itself, the Issuing Bank and the Group Lenders) and
grants to the Administrative Agent (for the benefit of itself, the Issuing Bank and the Group
Lenders), a first and prior Lien upon all of such Credit Party’s rights in and to the Cash
Collateral Accounts, all cash, documents, instruments and securities from time to time held
therein, and all rights pertaining to investments of funds in the Cash Collateral Accounts and all
products and proceeds of any of the foregoing. All cash, documents, instruments and securities
from time to time on deposit in the Cash Collateral Accounts, and all rights pertaining to
investments of funds in the Cash Collateral Accounts shall immediately and without any need for any
further action on the part of any of the Credit Parties, the Issuing Bank, any Group Lender or the
Administrative Agent, become subject to the Lien set forth in this Section 11.3, be deemed
Collateral for all purposes hereof and be subject to the provisions of this Credit Agreement.



     SECTION 11.4 Remedies. At any time during the continuation of an Event of Default,
the Administrative Agent may sell any documents, instruments and securities held in the Cash
Collateral Account and may immediately apply the proceeds thereof and any other cash held in the
Cash Collateral Account in accordance with Section 11.2.



     SECTION 11.5 LGPA Financing. In order to induce the Group Lenders to permit the
making of the PA Loan, the Credit Parties agree that prior to or simultaneously with each advance
of the PA Loan under the PA Credit Agreement, the Borrowers shall deposit or cause to be deposited
in a Cash Collateral Account an amount in cash or Cash Equivalents equal to 105% of the principal
amount of such advance. If the principal of any PA Loan under the PA



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Credit Agreement is repaid, in whole or in part, the Administrative Agent will if requested by
the Borrowers at a time when no Default or Event of Default shall have occurred and be continuing,
release the portion of such deposit in excess of 105% of the principal amount of the PA Loan then
outstanding. The PA Lender acknowledges that it shall have no interest whatsover in any collateral
provided pursuant to this Section 11.5 or any proceeds thereof, and that such collateral is being
provided solely for the benefit of the Group Lenders, the Administrative Agent and the Issuing
Bank.



12. THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE ISSUING BANK




     SECTION 12.1 Administration by the Administrative Agent. (a) The general
administration of the Fundamental Documents and any other documents contemplated by this Credit
Agreement or any other Fundamental Document shall be by the Administrative Agent or its designees.
Except as otherwise expressly provided herein, each of the Lenders and the Issuing Bank hereby
irrevocably authorizes the Administrative Agent, at its discretion, to take or refrain from taking
such actions as agent on its behalf and to exercise or refrain from exercising such powers under
the Fundamental Documents, the Notes and any other documents contemplated by this Credit Agreement
or any other Fundamental Document as are expressly delegated by the terms hereof or thereof, as
appropriate, together with all powers reasonably incidental thereto. The Administrative Agent
shall have no duties or responsibilities except as set forth in the Fundamental Documents.



          (b) The Lenders and the Issuing Bank hereby authorize the Administrative Agent (in its sole
discretion):




               (i) in connection with the sale or other disposition of any asset included in the Collateral
or the capital stock of any Guarantor, to the extent undertaken in accordance with the terms of
this Credit Agreement, to release a Lien granted to it (for the benefit of the Administrative
Agent, the Issuing Bank and the Lenders) on such asset or capital stock and/or to release such
Guarantor from its obligations hereunder;



               (ii) to determine that the cost to the Borrowers or another Credit Party is disproportionate
to the benefit to be realized by the Administrative Agent, the Issuing Bank and the Lenders by
perfecting a Lien in a given asset or group of assets included in the Collateral (other than any
item which is to be included in the Borrowing Base) and that the Borrowers or other Credit Party
should not be required to perfect such Lien in favor of the Administrative Agent (for the benefit
of itself, the Issuing Bank and the Lenders);



               (iii) to appoint subagents to be the holder of record of a Lien to be granted to the
Administrative Agent (for the benefit of the Administrative Agent, the Issuing Bank and the
Lenders);



               (iv) to confirm in writing the right of Quiet Enjoyment of licensees pursuant to the terms of
Section 8.13;



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               (v) in connection with an item of Product being produced by a Credit Party, the principal
photography of which is being done outside the United States, to approve arrangements with such
Credit Party as shall be satisfactory to the Administrative Agent with respect to the temporary
storage of the original negative film, the original sound track materials or other Physical
Materials of such item of Product in a production laboratory located outside the United States;



               (vi) to approve the terms and conditions of any sale and leaseback or other tax benefit
transaction pursuant to Section 6.1 hereof;



               (vii) to enter into and perform its obligations under the other Fundamental Documents;



               (viii) to enter into intercreditor and/or subordination agreements on terms acceptable to the
Administrative Agent with (A) the unions and/or the guilds with respect to the security interests
in favor of such unions and/or guilds required pursuant to the terms of the collective bargaining
agreements or (B) with Persons who have been granted Liens which are permitted pursuant to Section
6.2 hereof or (C) any licensee or licensor or co-producer having any rights to any item of Product
or (D) Persons providing any services in connection with any item of Product;



     SECTION 12.2 Advances and Payments. (a) On the date of each Loan, the Administrative
Agent shall be authorized (but not obligated) to advance, for the account of each of the LGEI
Lenders, the amount of the U.S. Dollar Loan to be made by it in accordance with its Percentage
hereunder. Each of the Lenders hereby authorizes and requests the Administrative Agent, to advance
for its account, pursuant to the terms hereof, the amount of the Loan to be made by it, and each of
the Lenders agrees forthwith to reimburse the Administrative Agent, as applicable, in immediately
available funds for the amount so advanced on its behalf by the Administrative Agent. If any such
reimbursement is not made in immediately available funds on the same day on which the
Administrative Agent shall have made any such amount available on behalf of any Lender, such Lender
shall pay interest to the Administrative Agent at a rate per annum equal to, in the case of the
Administrative Agent, the Administrative Agent’s cost of obtaining overnight funds in the New York
Federal Funds Market for the first three days following the time when the Lender fails to make the
required reimbursement, and thereafter at a rate per annum equal to the Alternate Base Rate plus
the Applicable Margin for Alternate Base Rate Loans. If and to the extent that any such
reimbursement shall not have been made to the Administrative Agent, the Borrowers agree to repay to
the Administrative Agent forthwith on demand a corresponding amount with interest thereon for each
day from the date such amount is made available to the Borrowers until the date such amount is
repaid to the Administrative Agent, in the case of an Alternate Base Rate Loan, at the Alternate
Base Rate plus the Applicable Margin for Alternate Base Rate Loans, and in the case of a Eurodollar
Loan, at the LIBO Rate plus the Applicable Margin for Eurodollar Loans.



          (b) As between the Administrative Agent on one hand and the Lenders on the other hand, any
amounts received by the Administrative Agent in connection with the Fundamental Documents, the
application of which is not otherwise provided for, shall be



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applied, first, to pay the accrued but unpaid Commitment Fees in accordance with each
Lender’s Percentage, second, to pay accrued but unpaid interest on the Notes in accordance
with the amount of outstanding Loans owed to each Lender, third, to pay the principal
balance outstanding on the Notes (with amounts payable on the principal balance outstanding on the
Notes in accordance with each Lender’s percentage), amounts then due in respect of unreimbursed
draws under the Letter of Credit and amounts outstanding under Currency Agreements and Interest
Rate Protection Agreements, and fourth, to pay any other amounts then due under this Credit
Agreement. All amounts to be paid to any Lender by the Administrative Agent shall be credited to
that Lender, after collection by the Administrative Agent in immediately available funds either by
wire transfer or deposit in such Lender’s correspondent account with the Administrative Agent or as
such Lender and the Administrative Agent shall from time to time agree.




     SECTION 12.3 Sharing of Setoffs, Cash Collateral and Sharing Events. (a) Each of the
Lenders agrees that if it shall, through the exercise of a right of banker’s lien, setoff or
counterclaim against any Credit Party (including, but not limited to, a secured claim under Section
506 of Title 11 of the United States Code or other security or interest arising from, or in lieu
of, such secured claim and received by such Lender under any applicable bankruptcy, insolvency or
other similar law) or otherwise, obtain payment in respect of its Obligations as a result of which
the unpaid portion of its Obligations is proportionately less than the unpaid portion of
Obligations of any of the other Lenders (a) it shall promptly purchase at par (and shall be deemed
to have thereupon purchased) from such other Lenders a participation in the Obligations of such
other Lenders, so that the aggregate unpaid principal amount of each of the Lender’s Obligations
and its participation in Obligations of the other Lenders shall be in the same proportion to the
aggregate unpaid amount of all remaining Obligations as the amount of its Obligations prior to the
obtaining of such payment was to the amount of all Obligations prior to the obtaining of such
payment and (b) such other adjustments shall be made from time to time as shall be equitable to
ensure that the Lenders share such payment pro rata. If all or any portion of such excess payment
is thereafter recovered from the Lender which originally received such excess payment, such
purchase (or portion thereof) shall be canceled and the purchase price restored to the extent of
such recovery. The Credit Parties expressly consent to the foregoing arrangements and agree that
any Lender or Lenders holding (or deemed to be holding) a participation in a Note, or Letter of
Credit may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any
and all moneys owing by either of the Borrowers to such Lender or Lenders as fully as if such
Lender or Lenders held a Note and was the original obligee thereon or was the issuer of the Letter
of Credit, in the amount of such participation.



          (b) Each of the Lenders agrees that if at any time while a Sharing Event is continuing and a
Lender’s outstanding Credit Exposure is proportionately less than its Percentage of the aggregate
Commitments hereunder it shall promptly purchase at par for cash (and shall be deemed to have
thereupon purchased) from such other Lenders a pro rata participation in the outstanding Credit
Exposure of such other Lenders, so that its Credit Exposure and its participations in the Credit
Exposure of the other Lenders shall be equal to its Percentage of the aggregate Commitments;
provided, however, that with regard to any portion of the Credit Exposure of such
other Lenders attributable to L/C Exposure, the Lender purchasing any pro rata participations shall
be deemed to have purchased a participation in such



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portion of the Credit Exposure without providing cash for such portion until any such Letter
of Credit is drawn.




          (c) Once a Sharing Event shall have occurred, it shall continue in existence (notwithstanding
a cure of the underlying Event of Default upon which such Sharing Event was based) unless
terminated by written agreement of all the Lenders holding outstanding Credit Exposure (including
participations bought in the Credit Exposure of other Lenders pursuant to Section 12.3(b).




     SECTION 12.4 Notice to the Lenders. Upon receipt by the Administrative Agent or the
Issuing Bank from any of the Credit Parties of any communication calling for an action on the part
of the Lenders, or upon notice to the Administrative Agent of any Event of Default, the
Administrative Agent or the Issuing Bank will in turn immediately inform the other Lenders in
writing (which shall include facsimile communications) of the nature of such communication or of
the Event of Default, as the case may be.



     SECTION 12.5 Liability of the Administrative Agent, Issuing Bank and Syndication
Agent. (a) The Administrative Agent, or the Issuing Bank, when acting on behalf of the
Lenders, may execute any of its duties under this Credit Agreement or the other Fundamental
Documents by or through its officers, agents, or employees and neither the Administrative Agent,
the Issuing Bank nor their respective officers, agents or employees shall be liable to the Lenders
or any of them for any action taken or omitted to be taken in good faith, nor be responsible to the
Lenders or to any of them for the consequences of any oversight or error of judgment, or for any
loss, unless the same shall happen through its gross negligence or willful misconduct. The
Administrative Agent, the Issuing Bank and their respective directors, officers, agents, and
employees shall in no event be liable to the Lenders or to any of them for any action taken or
omitted to be taken by it pursuant to: (i) instructions received by it from the Required Lenders
(and PA Lender, if such instructions relate to the Film Library), (ii) Section 12.15 hereof, or
(iii) in reliance upon the advice of counsel selected by it with reasonable care. The Syndication
Agent and its directors, officers, agents and employees shall in no event be liable to the Lenders
or to any of them for any reason whatsoever in connection with this Agreement. Without limiting
the foregoing, neither the Administrative Agent, the Issuing Bank, the Syndication Agent nor any of
their respective directors, officers, employees, or agents shall be responsible to any of the
Lenders for the due execution, validity, genuineness, effectiveness, sufficiency, or enforceability
of, or for any statement, warranty, or representation in, or for the perfection of any security
interest contemplated by, this Credit Agreement, any other Fundamental Document or any related
agreement, document or order, or for freedom of any of the Collateral or any of the Pledged
Securities from prior Liens or security interests, or shall be required to ascertain or to make any
inquiry concerning the performance or observance by the Borrower or any other Credit Party of any
of the terms, conditions, covenants, or agreements of this Credit Agreement, any other Fundamental
Document, or any related agreement or document.



          (b) None of the Administrative Agent, Syndication Agent (each in its capacity as agent for the
Lenders), the Issuing Bank or any of their respective directors, officers, employees, or agents
shall have any responsibility to the Borrowers or any other Credit Party on account of the failure
or delay in performance or breach by any of the Lenders of any of such Lender’s obligations under
this Credit Agreement, the other Fundamental Documents or any



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related agreement or document or in connection herewith or therewith. The Syndication Agent
shall not have any obligations, liabilities or duties under this Credit Agreement, the other
Fundamental Documents or any related agreement or document or in connection herewith or therewith
other than those applicable to a Lender (but only if such institution is a Lender) and it shall not
have or be deemed to have any fiduciary relationship with any Lender. No Lender nor any of its
directors, officers, employees or agents shall have any responsibility to the Borrower or any other
Credit Party on account of the failure or delay in performance or breach by any other Lender of
such other Lender’s obligations under this Credit Agreement, the other Fundamental Documents or any
related agreement or document or in connection herewith or therewith.




          (c) The Administrative Agent, as agent for the Lenders hereunder and the Issuing Bank in such
capacity, shall be entitled to rely on any communication, instrument, or document believed by it to
be genuine or correct and to have been signed or sent by a Person or Persons believed by it to be
the proper Person or Persons, and it shall be entitled to rely on advice of legal counsel,
independent public accountants, and other professional advisers and experts selected by it.




     SECTION 12.6 Reimbursement and Indemnification. Each of the Lenders agrees (i) to
reimburse the Administrative Agent and the Syndication Agent for such Lender’s Pro Rata Share of
any expenses and fees incurred for the benefit of the Lenders under the Fundamental Documents,
including, without limitation, counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, and any other expense incurred in connection with the
operations or enforcement thereof not reimbursed by or on behalf of the Borrower, (ii) to indemnify
and hold harmless the Administrative Agent, the Syndication Agent and any of their directors,
officers, employees, or agents, on demand, in accordance with such Lender’s Percentage, from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against, any of them in any way relating to or arising out of any
Completion Guaranty, the Fundamental Documents or any related agreement or document, or any action
taken or omitted by it or any of them under any Completion Guaranty, the Fundamental Documents or
any related agreement or document, to the extent not reimbursed by or on behalf of the Borrowers or
any other Credit Party (except such as shall result from their gross negligence or willful
misconduct), (iii) in the case of the U.S. Lenders only, to indemnify and hold harmless the Issuing
Bank and any of its directors, officers, employees, or agents, on demand, in the amount of its Pro
Rata Share, from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against it or any of them in any way relating to or
arising out of the issuance of any Letters of Credit or the failure to issue Letters of Credit if
such failure or issuance was at the direction of the Required Lenders (except as shall result from
the gross negligence or willful misconduct of the Person to be reimbursed, indemnified or held
harmless, as applicable). To the extent indemnification payments made by the Lenders pursuant to
this Section 12.6 are subsequently recovered by the Administrative Agent, the Syndication Agent or
the Issuing Bank from a Credit Party, the Administrative Agent will promptly refund such previously
paid indemnity payments to the Lenders.



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     SECTION 12.7 Rights of Administrative Agent. It is understood and agreed that each of
the Administrative Agent and the Syndication Agent shall have the same duties, rights and powers as
a Lender hereunder (including the right to give such instructions) as any of the other Lenders and
may exercise such rights and powers, as well as its rights and powers under other agreements and
instruments to which it is or may be party, and engage in other transactions with any Credit Party
or Affiliate thereof, as though it were not the Administrative Agent or the Syndication Agent, as
applicable, of the Lenders under this Credit Agreement and the other Fundamental Documents.



     SECTION 12.8 Independent Investigation by Lenders. Each of the Lenders acknowledges
that it has decided to enter into this Credit Agreement and the other Fundamental Documents and to
make the Loans and participate in the Letters of Credit hereunder based on its own analysis of the
transactions contemplated hereby and of the creditworthiness of the Credit Parties and agrees that
neither the Administrative Agent, the Syndication Agent nor the Issuing Bank shall bear any
responsibility therefor.



     SECTION 12.9 Agreement of Required Lenders. Upon any occasion requiring or permitting
an approval, consent, waiver, election or other action on the part of the Required Lenders, action
shall be taken by the Administrative Agent for and on behalf of, or for the benefit of, all Lenders
upon the direction of the Required Lenders and any such action shall be binding on all Lenders. No
amendment, modification, consent or waiver shall be effective except in accordance with the
provisions of Section 13.11 hereof.



     SECTION 12.10 Notice of Transfer. The Administrative Agent and the Issuing Bank may
deem and treat any Lender which is a party to this Credit Agreement as the owner of such Lender’s
respective portions of the Loans and participations in Letters of Credit for all purposes, unless
and until a written notice of the assignment or transfer thereof executed by any such Lender shall
have been received by the Administrative Agent and become effective in accordance with Section 13.3
hereof.



     SECTION 12.11 Successor Administrative Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the Borrowers, but such resignation
shall not become effective until acceptance by a successor agent of its appointment pursuant
hereto. Upon any such resignation, the retiring Administrative Agent shall promptly appoint a
successor agent from among the LGEI Lenders which successor shall be experienced and sophisticated
in entertainment industry lending, provided that such replacement is reasonably acceptable
(as evidenced in writing) to the Required Lenders and the Borrowers; provided,
however, that such approval by the Borrowers shall not be required at any time when a
Default or Event of Default is continuing. If no successor agent shall have been so appointed by
the retiring Administrative Agent and shall have accepted such appointment, within 30 days after
the retiring agent’s giving of notice of resignation, the Borrowers may appoint a successor agent
(which successor may be replaced by the Required Lenders; provided that such successor is
experienced and sophisticated in entertainment industry lending and reasonably acceptable to the
Borrowers), which shall be either a Lender or a commercial bank organized, licensed, carrying on
business under the laws of the United States of America or of any State thereof and shall have a
combined capital and surplus of at least U.S.$500,000,000 and shall be experienced and
sophisticated in entertainment industry lending. Upon the acceptance of any appointment as



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Administrative Agent hereunder by a successor agent, such successor agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and
obligations under this Credit Agreement, the other Fundamental Documents and any other credit
documentation. After any retiring Administrative Agent’s resignation hereunder as Administrative
Agent, the provisions of this Article 12 and Article 13 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent under this Credit
Agreement.



     SECTION 12.12 Successor Issuing Bank. The Issuing Bank may resign at any time by
giving prior written notice thereof to the Lenders and the Borrowers, but such resignation shall
not become effective until acceptance by a successor Issuing Bank of its appointment pursuant
hereto. Upon any such resignation, the retiring Issuing Bank shall promptly appoint a successor
Issuing Bank from among the Lenders, provided that such replacement is reasonably
acceptable (as evidenced in writing) to the Required Lenders and the Borrowers and has a credit
rating at least as high as that of the Issuing Bank; provided, however, that such
approval by the Borrowers shall not be required at any time when a Default or Event of Default is
continuing. If no successor Issuing Bank shall have been so appointed by the retiring Issuing Bank
and shall have accepted such appointment, within 30 days after the retiring Issuing Bank’s giving
of notice of resignation, the Borrowers may appoint a successor Issuing Bank (which successor may
be replaced by the Required Lenders; provided that such successor is reasonably acceptable to the
Borrowers), which shall be either a Lender or a commercial bank organized, licensed, carrying on
business under the laws of the United States of America or of any State thereof and shall have a
combined capital and surplus of at least U.S.$500,000,000. Upon the acceptance of any appointment
as Issuing Bank hereunder by a successor Issuing Bank, such successor Issuing Bank shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties of the retiring
Issuing Bank, and the retiring Issuing Bank shall be discharged from its duties and obligations
under this Credit Agreement, the other Fundamental Documents and any other credit documentation,
except with respect to Letters of Credit which are outstanding at the time of the resignation
unless the successor Issuing Bank replaces the retiring Issuing Bank as the issuing bank on such
Letters of Credit. The Borrowers and each Lender hereby agrees that each will use its commercially
reasonable efforts to replace any such outstanding Letters of Credit issued by the retiring Issuing
Bank. After any retiring Issuing Bank’s resignation hereunder as Issuing Bank, the provisions of
this Article 12 and Article 13 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Issuing Bank under this Credit Agreement.



     SECTION 12.13 Intentionally Omitted.



     SECTION 12.14 Quebec Power of Attorney. For the purposes of holding any security
granted by any of the Credit Parties pursuant to the laws of the Province of Quebec, the
Administrative Agent shall be the holder of an irrevocable power of attorney for itself, the
Issuing Bank, and all present and future lenders. By executing an Assignment and Acceptance, any
future Lender shall be deemed to ratify the power of attorney granted to the Administrative Agent
hereunder. The Lenders, the Issuing Bank, JPMorgan Chase Bank and the other Banking Service
Providers (herein acting through The Chase Manhattan Bank), and the Credit Parties agree that
notwithstanding Section 32 of the Act respecting the Special Powers of Legal Persons



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(Quebec), the Administrative Agent may, as the person holding the power of attorney of the
Lenders, the Issuing Bank and the Banking Service Providers, acquire any debentures or other title
of Indebtedness secured by any hypothec granted by any of the Credit Parties to the Administrative
Agent pursuant to the laws of the Province of Quebec.




     SECTION 12.15 Annex I. The relative rights of Group Lenders, PA Lender and
Administrative Agent with respect to the Collateral are governed by the provisions of Annex I, and
each of the Lenders, the Credit Parties and the Administrative Agent hereby agrees to be bound by
such provisions and each of the Lenders and Credit Parties authorizes the Administrative Agent to
take any action necessary to carry out the purpose of such provisions.



13. MISCELLANEOUS




     SECTION 13.1 Notices. Notices and other communications provided for herein shall be
in writing and shall be delivered or mailed (or if by facsimile communications equipment, delivered
by such equipment) addressed, (a) if to the Administrative Agent, the Issuing Bank or JPMorgan
Chase Bank, to it at (i) JPMorgan Chase Bank, N.A., 10 South Dearborn Street, 9th Floor, Chicago,
Illinois 60603-2003, Attention: Stephen C. Price (Telecopy No. (312) 325-3239), with copies to
(ii) JPMorgan Chase Bank, N.A., JPMorgan Loan Services, 21 South Clark Street 7th Floor, Chicago,
Illinois 60603, Attention: Lisa Smith (Telecopy No. 312-385-7096), with copies to (iii) J.P. Morgan
Securities Inc., 1999 Avenue of the Stars, 27th Floor, Los Angeles, California 90067, Attention:
Christa Thomas (Telecopy No. (310) 860-7260) and with copies to (iv) J.P. Morgan Europe Limited,
125 London Wall, London, EC2Y 5AJ, England, Attention: Loan and Agency — 9th Floor (Telecopy No.
44 207 777 2360), or (b) if to any Credit Party to it at Lions Gate Entertainment Inc., 2700
Colorado Avenue, Suite 200, Santa Monica, CA, 90404, Attn: Wayne Levin, Facsimile No.:
310-452-8934, or (c) if to a Lender, to it at its address set forth on the signature pages hereto,
or such other address as such party may from time to time designate by giving written notice to the
other parties hereunder. Any failure of the Administrative Agent or a Lender giving notice
pursuant to this Section 13.1, to provide a courtesy copy to a party as provided herein, shall not
affect the validity of such notice. All notices and other communications given to any party hereto
in accordance with the provisions of this Credit Agreement shall be deemed to have been given on
the fifth Business Day after the date when sent by registered or certified mail, postage prepaid,
return receipt requested, if by mail, or upon receipt by such party, if by any telegraphic or
facsimile communications equipment, in each case addressed to such party as provided in this
Section 13.1 or in accordance with the latest unrevoked written direction from such party.



     SECTION 13.2 Survival of Agreement, Representations and Warranties, etc. All
warranties, representations and covenants made by any of the Credit Parties herein, in any other
Fundamental Document or in any certificate or other instrument delivered by it or on its behalf in
connection with this Credit Agreement or any other Fundamental Document shall be considered to have
been relied upon by the Administrative Agent, Syndication Agent, Issuing Bank and the Lenders and,
except for any terminations, amendments, modifications or waivers thereof in accordance with the
terms hereof, shall survive the making of the Loans and the issuance of the Letters of Credit
herein contemplated and the execution and delivery to the



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Administrative Agent of the Notes regardless of any investigation made by the Administrative
Agent, Syndication Agent, Issuing Bank or the Lenders or on their behalf and shall continue in full
force and effect so long as any Obligation is outstanding and unpaid and so long as any Letter of
Credit remains outstanding and so long as the Commitments have not been terminated. All statements
in any such certificate or other instrument shall constitute representations and warranties by the
Credit Parties hereunder.



     SECTION 13.3 Successors and Assigns; Syndications; Loan Sales; Participations.



          (a) Whenever in this Credit Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party; provided,
however, that neither any Borrower nor any other Credit Party may assign its rights
hereunder without the prior written consent of the Administrative Agent, the Issuing Bank and all
of the Group Lenders, and all covenants, promises and agreements by or on behalf of any of the
Credit Parties which are contained in this Credit Agreement shall inure to the benefit of the
successors and assigns of the Administrative Agent, the Issuing Bank and the Group Lenders.




          (b) Each of the Group Lenders may (but only with the prior written consent of the
Administrative Agent, the Issuing Bank and the Borrowers, which consent shall not be unreasonably
withheld or delayed and in the case of the Borrowers no such consent shall be required if an Event
of Default has occurred and is continuing) assign all or a portion of its interests, rights and
obligations under this Credit Agreement (including, without limitation, all or a portion of its
Commitment and the same portion of all Loans at the time owing to it and the Notes held by it and
its obligations and rights with regard to Letters of Credit); provided, however,
that (i) each assignment shall be of a constant, and not a varying, percentage of the assigning
Group Lender’s interests, rights and obligations under this Credit Agreement, (ii) each assignment
shall be in a minimum Commitment amount (or at any time after the Commitment Termination Date,
minimum Loan amount) of at least U.S.$5,000,000 unless, in either case, each of the Borrowers and
the Administrative Agent otherwise consent, provided that no such consent of the Borrowers
shall be required if an Event of Default has occurred and is continuing, and (iii) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance, together with the
assigning Group Lender’s original Note and a processing and recordation fee of U.S.$4,500 to be
paid to the Administrative Agent by the assigning Group Lender or the assignee prior to an Event of
Default hereunder. Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date shall not (unless
otherwise agreed to by the Administrative Agent) be earlier than five Business Days after the date
of acceptance and recording by the Administrative Agent, (x) the assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Group Lender hereunder and under the other Fundamental Documents and shall be
bound by the provisions hereof and (y) the assigning Group Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Credit Agreement except that, notwithstanding such assignment, any rights
and remedies available to the Borrowers for any breaches by such assigning Group Lender of its
obligations hereunder while a Group Lender shall be preserved after such assignment and such Group
Lender shall not be relieved of any



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liability to the Borrowers due to any such breach. In the case of an Assignment and
Acceptance covering all or the remaining portion of the assigning Group Lender’s rights and
obligations under this Credit Agreement, such assigning Group Lender shall cease to be a party
hereto.




          (c) Each Group Lender may at any time make an assignment of its interests, rights and
obligations under this Credit Agreement, without the consent of the Administrative Agent, the
Issuing Bank or the Credit Parties, to (i) any Affiliate of such Group Lender or (ii) any other
Group Lender hereunder; provided that after giving effect to such assignment, the
assignee’s Percentage shall not exceed 10% of the aggregate amount of all Commitments then
outstanding hereunder. Any such assignment to any Affiliate of the assigning Group Lender or any
other Group Lender hereunder shall not be subject to the requirements of Section 13.3(b) that (x)
the amount of the Commitment (or Loans if applicable) of the assigning Group Lender subject to each
assignment be in a minimum principal amount of U.S.$5,000,000 for Commitments and (y) the payment
of a processing and recordation fee, and any such assignment to any Affiliate of the assigning
Group Lender shall not release the assigning Group Lender of its remaining obligations hereunder,
if any.




          (d) By executing and delivering an Assignment and Acceptance, the assigning Group Lender
thereunder and the assignee thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby and that such interest is free and clear of
any adverse claim, the assigning Group Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made in or in
connection with this Credit Agreement or any other Fundamental Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Fundamental Documents or any
other instrument or document furnished pursuant hereto or thereto; (ii) such assignor Group Lender
makes no representation or warranty and assumes no responsibility with respect to the financial
condition of any of the Credit Parties or the performance or observance by any of the Credit
Parties of any of their obligations under the Fundamental Documents or any other instrument or
document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the most recent financial statements delivered
pursuant to Sections 5.1(a) and 5.1(b) (or if none of such financial statements shall have then
been delivered, then copies of the financial statements referred to in Section 3.5 hereof) and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee agrees that it will,
independently and without reliance upon the assigning Group Lender, the Administrative Agent, the
Issuing Bank or any other Group Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under this Credit Agreement or any other Fundamental Document; (v) such assignee appoints and
authorizes the Administrative Agent and the Issuing Bank to take such action as the agent on its
behalf and to exercise such powers under this Credit Agreement as are delegated to the
Administrative Agent or the Issuing Bank by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will be bound by the
provisions of this Credit Agreement and will perform in accordance with their terms all of the
obligations which by the terms of this Credit Agreement are required to be performed by it as a
Group Lender.




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          (e) The Administrative Agent shall maintain at its address at which notices are to be given to
it pursuant to Section 13.1 a copy of each Assignment and Acceptance and a register for the
recordation of the names and addresses of the Group Lenders and the Commitments of, and principal
amount of the Loans owing to, each Group Lender from time to time (the “Register”). The
entries in the Register shall be conclusive, in the absence of manifest error, and the Credit
Parties, the Administrative Agent, the Issuing Bank and the Group Lenders may treat each Person
whose name is recorded in the Register as a Group Lender hereunder for all purposes of the
Fundamental Documents. The Register shall be available for inspection by any Credit Party or any
Group Lender at any reasonable time and from time to time upon reasonable prior notice.




          (f) Subject to the foregoing, upon its receipt of an Assignment and Acceptance executed by an
assigning Group Lender and an assignee together with the assigning Group Lender’s original Note and
the processing and recordation fee, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in the form of Exhibit J hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt
written notice thereof to the Borrowers. Within five (5) Business Days after receipt of the
notice, the Borrowers, at their own expense, shall execute and deliver to the Administrative Agent,
in exchange for the surrendered Note, a new Note to the order of such assignee in an amount equal
to the Commitment assumed by it pursuant to such Assignment and Acceptance and if the assigning
Group Lender has retained a Commitment hereunder a new Note to the order of the assigning Group
Lender in an amount equal to the Commitment retained by it hereunder. Such new Notes shall be in
an aggregate principal amount equal to the aggregate principal amount of the surrendered Note and
shall otherwise be in substantially the form of Exhibit A-1, A-2 or A-3, as applicable. In
addition the Credit Parties will promptly, at their own expense, execute such amendments to the
Fundamental Documents to which each is a party and such additional documents, and take such other
actions as the Administrative Agent or the assignee Group Lender may reasonably request in order to
give such assignee Group Lender the full benefit of the Liens contemplated by the Fundamental
Documents.




          (g) Each of the Group Lenders may, without the consent of any of the Credit Parties or the
Administrative Agent or the other Group Lenders, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of its Commitment and the Loans owing to it and the Note or
Notes held by it and its participation in Letters of Credit); provided, however,
that (i) any such Group Lender’s obligations under this Credit Agreement shall remain unchanged,
(ii) such participant shall not be granted any voting rights or any right to control the vote of
such Group Lender under this Credit Agreement, except with respect to proposed changes to interest
rates, amount of Commitments, final maturity of any Loan, releases of all or substantially all the
Collateral and fees (as applicable to such participant), (iii) any such Group Lender shall remain
solely responsible to the other parties hereto for the performance of such obligations, (iv) the
participating banks or other entities shall be entitled to the cost protection provisions contained
in Sections 2.12, 2.13, 2.14 and 12.3 hereof but a participant shall not be entitled to receive
pursuant to such provisions an amount larger than its share of the amount to which the Group Lender
granting such participation would have been entitled to receive and (v) the Credit Parties, the
Administrative Agent and the other Group Lenders shall continue to deal



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solely and directly with such Group Lender in connection with such Group Lender’s and its
participants’ rights and obligations under this Credit Agreement.




          (h) A Group Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 13.3, disclose to the assignee or participant
or proposed assignee or participant, any information relating to any of the Credit Parties
furnished to the Administrative Agent or such Group Lender by or on behalf of the Borrowers;
provided that prior to any such disclosure, each such assignee or participant or proposed
assignee or participant shall agree, by executing a confidentiality letter reasonably satisfactory
to LGEC to preserve the confidentiality of any confidential information relating to any of the
Credit Parties received from such Group Lender.




          (i) Any assignment pursuant to paragraph (b) or (c) of this Section 13.3 shall constitute an
amendment of the Schedule of Commitments as of the effective date of such assignment.




          (j) The Credit Parties agree that any Group Lender may at any time and from time to time
pledge or otherwise grant a security interest in any Loan or in any Note evidencing the Loans (or
any part thereof) to any Federal Reserve Bank.




          (k) Notwithstanding any other provision of this Agreement and so long as no Event of Default
shall have occurred and be continuing, no portion of the LGEI Commitment, UK Borrower Commitment or
the Australia Borrower Commitment may be assigned or transferred to any Person if interest payable
to such person will be subject to withholding, unless consented to by the Borrowers.




     SECTION 13.4 Expenses; Documentary Taxes. Whether or not the transactions hereby
contemplated shall be consummated, the Borrowers agree to pay (a) all reasonable out-of-pocket
expenses incurred by the Administrative Agent or JPMorgan Securities Inc. in connection with the
performance of due diligence, the syndication of the credit facility contemplated hereby, the
negotiation, preparation, execution, delivery, waiver or modification and administration of this
Credit Agreement and any other documentation contemplated hereby, the making of the Loans and the
issuance of the Letters of Credit, the Collateral, the Pledged Securities, any Fundamental Document
or any Completion Guaranty for an item of Product, including but not limited to, the reasonable
out-of-pocket costs and internally allocated charges of audit or field examinations of the
Administrative Agent in connection with the administration of this Credit Agreement, the
verification of financial data and the transactions contemplated hereby, and the reasonable fees
and disbursements of Morgan, Lewis & Bockius LLP, counsel for the Administrative Agent and the
Issuing Bank and any other counsel that the Administrative Agent or the Issuing Bank shall retain,
and (b) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing
Bank or the Group Lenders in the enforcement or protection (as distinguished from administration)
of the rights and remedies of the Issuing Bank or the Group Lenders in connection with this Credit
Agreement, the other Fundamental Documents, the Letters of Credit or the Notes, or as a result of
any transaction, action or non-action arising from any of the foregoing, including but not limited
to, the reasonable fees and disbursements of any counsel for the Administrative Agent, the Issuing
Bank or the Group Lenders. Such payments shall be made on the date this Credit Agreement is
executed by the



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Borrowers and thereafter on demand. The Borrowers agree that they shall indemnify the
Administrative Agent, the Issuing Bank and the Group Lenders from and hold them harmless against
any documentary taxes, assessments or charges made by any Governmental Authority by reason of the
execution and delivery of this Credit Agreement or the Notes or the issuance of the Letters of
Credit. The obligations of the Borrowers under this Section shall survive the termination of this
Credit Agreement, the payment of the Loans and/or the expiration of any Letter of Credit.



     SECTION 13.5 Indemnification of the Administrative Agent, the Syndication Agent, the
Issuing Bank and the Lenders. The Borrowers agree (a) to indemnify and hold harmless the
Administrative Agent, the Syndication Agent, the Issuing Bank and the Lenders and their respective
directors, officers, employees, trustees and agents (each, an “Indemnified Party”) (to the full
extent permitted by Applicable Law) from and against any and all claims, demands, losses, judgments
and liabilities (including liabilities for penalties) of whatsoever nature, and (b) to pay to the
Indemnified Parties an amount equal to the amount of all costs and expenses, including reasonable
legal fees and disbursements, and with regard to both (a) and (b) in connection with or resulting
from any litigation, investigation or other proceedings relating to the Collateral, this Credit
Agreement, the other Fundamental Documents and the Letters of Credit, the making of the Loans, any
attempt to audit, inspect, protect or sell the Collateral, or the administration and enforcement or
exercise of any right or remedy granted to the Administrative Agent, the Syndication Agent, the
Issuing Bank or Lenders hereunder or thereunder but excluding therefrom all claims, demands,
losses, judgments, liabilities, costs and expenses arising out of or resulting from (i) the gross
negligence or willful misconduct of an Indemnified Party, (ii) litigation or claims among
Indemnified Parties in connection with the Fundamental Documents or in any way relating to the
transactions contemplated hereby and (iii) claims asserted or litigation commenced against any of
the any Indemnified Party by a Credit Party in which the Credit Party is the prevailing party. The
foregoing indemnity agreement includes any reasonable costs incurred by any Indemnified Party in
connection with any action or proceeding which may be instituted in respect of the foregoing by any
Indemnified Party, or by any other Person either against the Lenders or in connection with which
any officer, director, agent or employee of any Indemnified Party is called as a witness or
deponent, including, but not limited to, the reasonable fees and disbursements of Morgan, Lewis &
Bockius LLP, counsel to the Administrative Agent and the Issuing Bank, and any out-of-pocket costs
incurred by any Indemnified Party in appearing as a witness or in otherwise complying with legal
process served upon them. Except as otherwise required by Applicable Law which may not be waived,
the Lenders shall not be liable to the Borrowers for any matter or thing in connection with this
Credit Agreement other than their express obligations hereunder, including obligations to make
Loans and account for moneys actually received by them in accordance with the terms hereof.



          Whenever the provisions of this Credit Agreement or any other Fundamental Document provide
that, if any Credit Party shall fail to do any act or thing which it has covenanted to do
hereunder, the Administrative Agent may (but shall not be obligated to) do the same or cause it to
be done or remedy any such breach and if the Administrative Agent does the same or causes it to be
done, there shall be added to the Obligations hereunder the cost or expense incurred by the
Administrative Agent in so doing, and any and all amounts expended by the Administrative Agent in
taking any such action shall be repayable to it upon its demand therefor and shall (x) for advances
made by the Administrative Agent, bear interest at 2% in



- 138 -









 






excess of the Alternate Base Rate, from time to time in effect from the date advanced to the
date of repayment.




          All indemnities contained in this Section 13.5 shall survive the expiration or earlier
termination of this Credit Agreement and shall inure to the benefit of any Person who was a Lender
notwithstanding such Person’s assignment of all its Loans and Commitments as to any actions taken
or omitted to be taken by it while it was a Lender.




          SECTION 13.6 CHOICE OF LAW. THIS CREDIT AGREEMENT AND THE NOTES SHALL IN ALL RESPECTS
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK WHICH ARE
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE AND, IN THE CASE OF
PROVISIONS RELATING TO INTEREST RATES, ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. EACH
LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION
NO. 500 AS ADOPTED OR AMENDED FROM TIME TO TIME (THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS
NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.




          SECTION 13.7 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS CREDIT
AGREEMENT, THE SUBJECT MATTER HEREOF, ANY OTHER FUNDAMENTAL DOCUMENT OR THE SUBJECT MATTER THEREOF,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR
OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO
THAT THE PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH OTHER PARTIES
HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS CREDIT AGREEMENT AND ANY OTHER
FUNDAMENTAL DOCUMENT. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 13.7
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO
TRIAL BY JURY.




          SECTION 13.8 WAIVER WITH RESPECT TO DAMAGES. EACH CREDIT PARTY ACKNOWLEDGES THAT
NEITHER THE ADMINISTRATIVE AGENT, THE ISSUING BANK NOR ANY LENDER HAS ANY FIDUCIARY RELATIONSHIP
WITH, OR FIDUCIARY DUTY TO, ANY CREDIT PARTY ARISING OUT OF OR IN CONNECTION WITH THIS CREDIT
AGREEMENT OR ANY OTHER



- 139 -









 






FUNDAMENTAL DOCUMENT AND THE RELATIONSHIP BETWEEN THE ADMINISTRATIVE AGENT, THE
SYNDICATION AGENT, THE ISSUING BANK AND THE LENDERS, ON THE ONE HAND, AND THE CREDIT PARTIES, ON
THE OTHER HAND, IN CONNECTION THEREWITH IS SOLELY THAT OF DEBTOR AND CREDITOR. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NO CREDIT PARTY SHALL ASSERT, AND EACH CREDIT PARTY HEREBY WAIVES, ANY
CLAIMS AGAINST THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE ISSUING BANK, AND THE LENDERS
ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO
DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS CREDIT
AGREEMENT, ANY FUNDAMENTAL DOCUMENT, ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.




     SECTION 13.9 No Waiver. No failure on the part of the Administrative Agent, any
Lender or the Issuing Bank to exercise, and no delay in exercising, any right, power or remedy
hereunder, under the Notes or any other Fundamental Document or with regard to any Letter of Credit
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise of any other right,
power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.



     SECTION 13.10 Extension of Payment Date. Except as otherwise specifically provided in
Article 2 hereof, should any payment or prepayment of principal of or interest on the Notes or any
other amount due hereunder, become due and payable on a day other than a Business Day, the due date
of such payment or prepayment shall be extended to the next succeeding Business Day and, in the
case of a payment or prepayment of principal, interest shall be payable thereon at the rate herein
specified during such extension.



     SECTION 13.11 Amendments, etc.



          (a) No modification, amendment or waiver of any provision of this Credit Agreement or any
other Fundamental Document, and no consent to any departure by the Borrowers herefrom or therefrom,
shall in any event be effective unless the same shall be in writing and signed by the Required
Lenders and then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given; provided, however, that no such modification, waiver,
consent or amendment shall, without the written consent of (a) each affected Group Lender, (i)
change the Commitment of such Group Lender, (ii) reduce the interest payable on such Group Lender’s
Loans, (iii) alter the principal amount of any Loan, (iv) reduce the rate at which the Commitment
Fees are payable to such Group Lender or (v) reduce the fees payable with respect to Letters of
Credit issued hereunder as set forth in Section 2.6(f); (b) all Group Lenders, (i) amend or modify
any provision of this Credit Agreement, if any, which expressly provides for the unanimous consent
or approval of the Group Lenders, (ii) release a substantial portion of the Collateral or any of
the Pledged Securities (except as contemplated herein) or release any Guarantor from its
obligations hereunder, (iii) extend the Maturity Date, (iv) amend the definition of “Collateral”
(and defined terms used in the definition of Collateral),




- 140 -









 







(v) amend or modify Section 2.1(c), 2.13(d), 2.6(a)(i), 2.6(i) or this Section 13.11, (vi)
increase the advance rates of any components or add any new components to the Borrowing Base; and
(vii) amend or modify the definition of “Required Lenders”. Notwithstanding the foregoing, the
Borrowers may request an Incremental Facility in accordance with Section 2.23 hereof without the
consent of the Lenders. No such amendment or modification may adversely affect the rights and
obligations of the Administrative Agent hereunder without its prior written consent or the rights
and obligations of the Issuing Bank without its prior written consent. No notice to or demand on
the Borrowers shall entitle the Borrowers to any other or further notice or demand in the same,
similar or other circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not such Note shall have
been marked to indicate such amendment, modification, waiver or consent and any consent by any
holder of a Note shall bind any Person subsequently acquiring such Note, whether or not such Note
is so marked.




     SECTION 13.11.A Certain Matters Regarding PA Lender and Amendments. No modification,
amendment or waiver of any provision of Amendment No. 11 or Annex I or any provisions of the Credit
Agreement amended by such Amendment No. 11, and no consent to any departure by any other party
therefrom, shall in any event be effective unless the same shall be in writing and signed by the PA
Lender and then such waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No provision of Amendment No. 11, Annex I or any provision of the Credit
Agreement amended by such Amendment No. 11 shall be terminated without the written consent of the
PA Lender as long as the PA Obligations are outstanding. The PA Lender hereby consents to any
modification, waiver, consent or amendment which is hereafter approved by the requisite Group
Lenders which may (i) release a substantial portion of the Collateral which does not include the
Film Library, (ii) extend the Maturity Date, (iii) amend the definition of “Required Lenders,” (iv)
amend the definition of “Collateral” (and defined terms used in the definition of Collateral) other
than the Film Library, (v) amend or modify Section 2.1(c), 2.2, 2.13(d), 2.6(a)(i), 2.6(i) or
Section 13.11 or (vi) increase the advance rates of any components or add any new components to the
Borrowing Base



     SECTION 13.12 Severability. Any provision of this Credit Agreement or of the Notes
which is invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability without invalidating
the remaining provisions hereof, and any such invalidity, illegality or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.



     SECTION 13.13 SERVICE OF PROCESS. EACH PARTY HERETO (EACH A “SUBMITTING
PARTY”) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW
YORK IN NEW YORK COUNTY AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT
OF OR BASED UPON THIS CREDIT AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE LETTERS OF CREDIT), THE
SUBJECT MATTER HEREOF, ANY OTHER FUNDAMENTAL DOCUMENT AND THE SUBJECT MATTER THEREOF. EACH
SUBMITTING PARTY TO THE EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES NOT TO
ASSERT, BY WAY OF MOTION, AS A DEFENSE,



- 141 -









 







OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN THE ABOVE-NAMED COURTS,
ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF SUCH COURTS, THAT ITS PROPERTY
IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS
CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF, THE OTHER FUNDAMENTAL DOCUMENT OR THE SUBJECT MATTER
THEREOF (AS APPLICABLE) MAY NOT BE ENFORCED IN OR BY SUCH COURT, (B) HEREBY WAIVES THE RIGHT TO
REMOVE ANY SUCH ACTION, SUIT OR PROCEEDING INSTITUTED BY THE ADMINISTRATIVE AGENT OR A LENDER IN
STATE COURT TO FEDERAL COURT, AND (C) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION, SUIT OR
PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE
FROM THE SAME SUBJECT MATTER. EACH SUBMITTING PARTY HEREBY CONSENTS TO SERVICE OF PROCESS BY MAIL
AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN TO IT PURSUANT TO SECTION 13.1 HEREOF. EACH
SUBMITTING PARTY AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY
MAIL IS MADE FOR THE EXPRESS BENEFIT OF EACH OF THE OTHER SUBMITTING PARTIES. FINAL JUDGMENT
AGAINST ANY SUBMITTING PARTY IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION (X) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED
OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE AMOUNT OF INDEBTEDNESS OR
LIABILITY OF THE SUBMITTING PARTY THEREIN DESCRIBED OR (Y) IN ANY OTHER MANNER PROVIDED BY OR
PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION, PROVIDED, HOWEVER, THAT THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR A LENDER MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER
JUDICIAL PROCEEDINGS AGAINST A SUBMITTING PARTY OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT
OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE SUBMITTING PARTY OR SUCH ASSETS MAY BE
FOUND.



     SECTION 13.14 Headings. Section headings used herein and the Table of Contents are
for convenience only and are not to affect the construction of or be taken into consideration in
interpreting this Credit Agreement.



     SECTION 13.15 Execution in Counterparts. This Credit Agreement may be executed in any
number of counterparts, each of which shall constitute an original, but all of which taken together
shall constitute one and the same instrument.



     SECTION 13.16 Subordination of Intercompany Indebtedness, Receivables and Advances.
(a) Each Credit Party hereby agrees that any intercompany Indebtedness or other intercompany
receivables or intercompany advances of any other Credit Party, directly or indirectly, in favor of
such Credit Party of whatever nature at any time outstanding shall be completely subordinate in
right of payment to the prior payment in full of the Obligations, and



- 142 -









 







that no payment on any such Indebtedness, receivable or advance shall be made (i) except
intercompany receivables and intercompany advances permitted pursuant to the terms hereof may be
repaid and intercompany Indebtedness permitted pursuant to the terms hereof may be repaid, in each
case so long as no Default or Event of Default, shall have occurred and be continuing and (ii)
except as specifically consented to by all the Group Lenders in writing, until the prior payment in
full of all the Obligations and termination of the Commitments.



          (b) In the event that any payment on any such Indebtedness shall be received by such Credit
Party other than as permitted by Section 13.16(a) before payment in full of all Obligations and
termination of the Commitments, such Credit Party shall receive such payments and hold the same in
trust for, segregate the same from its own assets and shall immediately pay over to, the
Administrative Agent on behalf of itself, the Issuing Bank and the Group Lenders all such sums to
the extent necessary so that the Administrative Agent, the Issuing Bank and the Group Lenders shall
have been paid all Obligations owed or which may become owing.




     SECTION 13.17 Entire Agreement. This Credit Agreement (including the Exhibits and
Schedules hereto) represents the entire agreement of the parties with regard to the subject matter
hereof and the terms of any letters and other documentation entered into between any of the parties
hereto (other than the Fee Letter) prior to the execution of this Credit Agreement which relate to
Loans to be made or the Letters of Credit to be issued hereunder shall be replaced by the terms of
this Credit Agreement.



     SECTION 13.18 Transition. Each of the Group Lenders whose name appears on the
Schedule of Commitments attached hereto as Schedule 1 acknowledges and agrees that, upon execution
of this Credit Agreement, each of the Group Lenders who was a party to the Existing Credit
Agreement but is not listed on the Schedule of Commitments hereto shall (i) be paid the full amount
of principal and interest outstanding on its Loans and (ii) relinquish its rights and be released
from its obligations under this Credit Agreement. The parties hereto confirm that this Credit
Agreement shall not constitute a novation of the obligations of each Credit Party (as such term was
defined in the Existing Credit Agreement) under the Existing Credit Agreement and in any event, the
Administrative Agent acting on behalf of and for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders (as such terms were defined in the Existing Credit Agreement) and all
other parties to the Existing Credit Agreement and this Credit Agreement expressly reserve all
hypothecs, debentures, debenture pledge agreements, guarantees and all other security interests
granted in favour of the Administrative Agent and the Group Lenders pursuant to the Existing Credit
Agreement which hypothecs, debentures, debenture pledge agreements, guarantees and other security
interests shall continue to remain in full force and effect.



- 143 -









 





          IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed
as of the day and the year first written.




	 	 	 	 	 	 	 	 	 
	 	 	BORROWERS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LIONS GATE ENTERTAINMENT INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By
	 	/s/	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LIONS GATE UK LIMITED (formerly Redbus Film

Distribution Limited)	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By
	 	/s/	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LIONS GATE AUSTRALIA PTY LIMITED	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By
	 	/s/	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	3 WISE GUYS PRODUCTIONS INC.	 	 
	 	 	3F SERVICES, INC.	 	 
	 	 	ALL ABOUT US PRODUCTIONS INC.	 	 
	 	 	AM PSYCHO PRODUCTIONS, INC.	 	 
	 	 	ARIMA INC.	 	 
	 	 	ARTISAN ENTERTAINMENT INC.	 	 
	 	 	ARTISAN FILMED PRODUCTIONS, INC.	 	 
	 	 	ARTISAN HOME ENTERTAINMENT INC.	 	 
	 	 	ARTISAN MUSIC INC.	 	 
	 	 	ARTISAN PICTURES INC.	 	 
	 	 	ARTISAN RELEASING INC.	 	 
	 	 	ARTISAN TELEVISION INC.	 	 
	 	 	BD OPTICAL MEDIA, INC.	 	 
	 	 	BL DISTRIBUTION CORP.	 	 
	 	 	BLUE PRODUCTIONS INC.	 	 
	 	 	BURROWERS PRODUCTIONS INC.	 	 
	 	 	CAVE PRODUCTIONS INC.	 	 
	 	 	CRASH TELEVISION PRODUCTIONS INC.	 	 
	 	 	CUPID PRODUCTIONS INC.	 	 
	 	 	CUT PRODUCTIONS INC.	 	 






 









 






	 	 	 	 	 
	 

	 	DANCING ELK PRODUCTIONS INC.
	 	 
	 

	 	DEAD ZONE PRODUCTION CORP.	 	 
	 

	 	DEBMAR/MERCURY LLC	 	 
	 

	 	DEBMAR/MERCURY INTERNATIONAL LIMITED (UK)	 	 
	 

	 	DEBMAR/MERCURY (WW) PRODUCTIONS, LLC	 	 
	 

	 	DEBMAR STUDIOS INC.	 	 
	 

	 	DJM SERVICES INC.	 	 
	 

	 	DRESDEN FILES PRODUCTIONS CORP.	 	 
	 

	 	DRESDEN FILES PRODUCTIONS I CORP.	 	 
	 

	 	EMPLOYEE PRODUCTIONS INC.	 	 
	 

	 	FEAR ITSELF PRODUCTIONS CORP.	 	 
	 

	 	FHCL, LLC	 	 
	 

	 	FILM HOLDINGS CO.	 	 
	 

	 	FIVE DAYS PRODUCTIONS CORP.	 	 
	 

	 	GC FILMS, INC.	 	 
	 

	 	GRINDSTONE ENTERTAINMENT GROUP, LLC	 	 
	 

	 	HIGHER POST, LLC	 	 
	 

	 	HORSEMEN PRODUCTIONS, LLC	 	 
	 

	 	HYPERCUBE PRODUCTIONS CORP.	 	 
	 

	 	INVISIBLE CASTING INC.	 	 
	 

	 	JV1 ISH, LLC	 	 
	 

	 	ISH TELEVISION DEVELOPMENT, LLC	 	 
	 

	 	ISH PROJECTS, LLC	 	 
	 

	 	KILL PIT PRODUCTIONS INC.	 	 
	 

	 	KING OF THE WORLD PRODUCTIONS LLC	 	 
	 

	 	LANDSCAPE ENTERTAINMENT CORP.	 	 
	 

	 	LC PRODUCTIONS CORP.	 	 
	 

	 	LG HORROR CHANNEL HOLDINGS LLC	 	 
	 

	 	LG PICTURES INC.	 	 
	 

	 	LIONS GATE ENTERTAINMENT CORP.	 	 
	 

	 	LIONS GATE FILMS INC.	 	 
	 

	 	LIONS GATE FILMS OF PUERTO RICO, INC.	 	 
	 

	 	LIONS GATE FILMS PRODUCTIONS CORP./PRODUCTIONS FILMS
LIONS GATE S.A.R.F.	 	 
	 

	 	LIONS GATE HOME ENTERTAINMENT UK LIMITED (formerly

     Redbus Home Entertainment Limited)	 	 
	 

	 	LIONS GATE INDIA, INC.	 	 
	 

	 	LIONS GATE MUSIC CORP.	 	 
	 

	 	LIONS GATE MUSIC PUBLISHING LLC	 	 
	 

	 	LIONS GATE ONLINE SHOP, INC.	 	 
	 

	 	LIONS GATE PENNSYLVANIA, INC.	 	 






 









 






	 	 	 	 	 
	 

	 	LIONS GATE PICTURES UK LIMITED (formerly Redbus
Pictures Limited)	 	 
	 

	 	LIONS GATE RECORDS, INC.	 	 
	 

	 	LIONS GATE SPIRIT HOLDINGS, LLC	 	 
	 

	 	LIONS GATE TELEVISION DEVELOPMENT LLC	 	 
	 

	 	LIONS GATE TELEVISION INC.	 	 
	 

	 	LIONS GATE X PRODUCTIONS LLC	 	 
	 

	 	LOVESPRING PRODUCTIONS, INC.	 	 
	 

	 	LUCKY 7 PRODUCTIONS CORP.	 	 
	 

	 	MANDATE PICTURES LLC	 	 
	 

	 	MANDATE INTERNATIONAL, LLC	 	 
	 

	 	MANDATE FILMS, LLC	 	 
	 

	 	MOTEL MAN PRODUCTIONS INC.	 	 
	 

	 	MOTHER PRODUCTIONS CORP.	 	 
	 

	 	MQP, LLC	 	 
	 

	 	NGC FILMS, INC.	 	 
	 

	 	NURSE PRODUCTIONS, INC.	 	 
	 

	 	PALM SPRINGS PRODUCTIONS INC.	 	 
	 

	 	PEARL RIVER HOLDINGS CORP.	 	 
	 

	 	PLANETARY PRODUCTIONS, LLC	 	 
	 

	 	PLAYLIST, LLC	 	 
	 

	 	POST PRODUCTION, INC.	 	 
	 

	 	POWER MONGERING DESPOT, INC.	 	 
	 

	 	PRODUCTION MANAGEMENT INC.	 	 
	 

	 	PROFILER PRODUCTIONS CORP.	 	 
	 

	 	PSYCHO PRODUCTIONS SERVICES CORP.	 	 
	 

	 	SCREENING ROOM, INC.	 	 
	 

	 	SILENT DEVELOPMENT CORP.	 	 
	 

	 	TALK PRODUCTIONS CORP.	 	 
	 

	 	TERRESTRIAL PRODUCTIONS CORP.	 	 
	 

	 	TOUCH PRODUCTIONS CORP.	 	 
	 

	 	U.R.O.K. PRODUCTIONS INC.	 	 
	 

	 	VERDICT PRODUCTIONS, INC.	 	 
	 

	 	VESTRON INC.	 	 
	 

	 	WEEDS PRODUCTIONS INC.	 	 
	 

	 	WILDFIRE PRODUCTIONS INC.	 	 
	 

	 	WILDFIRE 2 PRODUCTIONS INC.	 	 
	 

	 	WILDFIRE 3 PRODUCTIONS INC.	 	 
	 

	 	WILDFIRE 4 PRODUCTIONS INC.	 	 
	 

	 	WRITERS ON THE WAVE	 	 






	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






 









 






	 	 	 	 	 	 	 	 	 
	 	 	BLAIR WITCH FILM PARTNERS LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Artisan Filmed Productions Inc.	 	 
	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:

Name:
	 	/s/
 

	 	 
	 

	 	 	 	Title:
	 	 General Counsel	 	 






	 	 	 	 	 	 	 
	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.

individually and as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	J.P. MORGAN EUROPE LTD, as UK Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Managing Director	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, N.A.

individually and as Syndication Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 






 









 






	 	 	 	 	 	 	 
	 	 	CITIBANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	HSBC BANK USA, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND PLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Managing Director	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	UNION BANK OF CALIFORNIA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Assistant Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 






 









 






	 	 	 	 	 	 	 
	 	 	THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Director	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	CITY NATIONAL BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	FIRST BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	CALIFORNIA BANK & TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	ISRAEL DISCOUNT BANK OF NEW YORK	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Senior Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 






 









 






	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	NATIXIS	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile:	 	 
	 
	 	 	 	 	 	 
	 	 	MANUFACTURERS BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
 

Name:
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 

	 	 	 	Address:	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	Facsimile: